An investor puts 3,000 into a life insurance policy that pays 7.5% simple annual interest if no additional investment is made into the policy how much accumulated interest should the investor except at the end of 9 years
To calculate the accumulated interest, we need to use the simple interest formula:
Simple Interest = Principal * Rate * Time
Here, the principal amount is $3,000, and the interest rate is 7.5% or 0.075 as a decimal. The time period is 9 years. Plugging in these values:
Simple Interest = 3000 * 0.075 * 9
Simple Interest = 2025
Therefore, the investor should expect accumulated interest of $2,025 at the end of 9 years.