An investor puts $5,600 into a life insurance policy that pays 11.5% simple annual interest. If no additional investment is made into the policy, how much accumulated interest should the investor expect at the end of 25 years?
$12,400.00
$85,125.51
$21,700.00
$16,100.00
$21,700.00
To calculate the accumulated interest, you can use the formula:
Interest = Principal x Rate x Time
Principal = $5,600
Rate = 11.5%
Time = 25 years
Interest = $5,600 x 0.115 x 25 = $21,700
Therefore, the investor should expect $21,700 in accumulated interest at the end of 25 years.