Maino invested K5000 in a term deposit account paying simple interest of 5% annually. How much was is investment worth after 10 years?
The formula for calculating simple interest is:
Interest = Principal x Rate x Time
Given that the principal (P) is K5000, the interest rate (R) is 5% or 0.05, and the time (T) is 10 years, we can calculate the interest earned on the investment after 10 years:
Interest = K5000 x 0.05 x 10 = K2500
Therefore, after 10 years, Maino's investment will be worth K5000 + K2500 = K7500.
What is the amount accumulated after 10 years
To calculate the total amount accumulated after 10 years, we need to add the interest earned to the original principal:
Total amount = Principal + Interest
Total amount = K5000 + K2500
Total amount = K7500
Therefore, Maino's investment will be worth K7500 after 10 years.
Use this formula: A=PR^n, where A is the amount accumulated, P is the principal, R is [1+(r/100)] and n is the term
Using the formula A = P(1 + r)^n,
Where:
P = K5000 (principal)
r = 5% or 0.05
n = 10 years
A = K5000(1 + 0.05)^10
A = K5000(1.05)^10
A = K5000(1.62889)
A = K8144.45
Therefore, Maino's investment will be worth K8144.45 after 10 years.