Jamal has invested 5000.00 in an account that earns 2.50% interest per annum for a term of 10 years.
a) how much interest will he earn?
B)How much will his investment be worth at the end of the term?
haha so i calculate 5000x0.025x10 and that's question B? or A?
That gives you the interest.
oh ty
To calculate the answers, we need to use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A is the final amount
P is the principal amount (initial investment)
r is the annual interest rate (expressed as a decimal)
n is the number of times that interest is compounded per year
t is the number of years
a) To find out how much interest Jamal will earn, we can subtract the initial investment from the final amount:
Interest = A - P
In this case, P = $5000.00, r = 2.50% (or 0.025 as a decimal), n = 1 (interest compounded annually), and t = 10 years.
Using the formula, we can calculate the value of A:
A = $5000(1 + 0.025/1)^(1*10)
= $5000(1.025)^10
≈ $6,395.43
Interest = $6,395.43 - $5000.00
= $1,395.43
Therefore, Jamal will earn approximately $1,395.43 in interest.
b) To find out how much Jamal's investment will be worth at the end of the term, we need to add the interest to the initial investment:
Final amount = P + Interest
Using the same values, we can calculate the final amount:
Final amount = $5000.00 + $1,395.43
= $6,395.43
Therefore, Jamal's investment will be worth approximately $6,395.43 at the end of the term.
I = prt
I = 5,000 * 0.025 * 10
I = ?