An investor puts 3,000 into a life insurance policy that pays 7.5simple annual interestIf no additional investment is made into the policy, how much accumulated interest should the investor expect at the end of 9 years?
To calculate the accumulated interest, we can use the formula for simple interest:
Interest = Principal * Rate * Time
Here, the principal (P) is $3,000, the rate (R) is 7.5% or 0.075, and the time (T) is 9 years.
Therefore, the accumulated interest at the end of 9 years can be calculated as:
Interest = 3000 * 0.075 * 9 = $2,025.