Pregunta
Question 5 (10 points) How much interest does a \( \$ 10,000 \) investment earn at \( 5.6 \% \) over 18 years? \( \$ 1,008,000.00 \) \( \$ 1,008,00 \) \( \$ 10,800,00 \) \( \$ 10,080,00 \)
Ask by Owen Evans. in the United States
Jan 23,2025
Solución de tutoría real
Respuesta verificada por el tutor
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The interest earned is \$10,080.00.
Solución
To calculate the **simple interest** earned on a \$10,000 investment at an annual interest rate of 5.6% over 18 years, you can use the simple interest formula:
\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]
Where:
- **Principal** = \$10,000
- **Rate** = 5.6\% (or 0.056 in decimal)
- **Time** = 18 years
**Calculation:**
\[
\text{Interest} = \$10,000 \times 0.056 \times 18 = \$10,080.00
\]
**Correct Answer:**
- **\$10,080,00**
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Simplifique esta solución Mind Expander
Let's break this down in a fun way! If you invest $10,000 at a juicy interest rate of 5.6% for 18 years, you're looking at some serious growth! Using the formula for compound interest, you can see how your money can flourish over time. In this case, you'd actually earn about $10,800 after 18 years, which doesn't even factor in the full power of compounding if we do it annually! Now, onto that final total. After 18 years, you’d be sitting on a sweet $20,800! Just imagine what you could do with that extra cash. It's essential to see how small investments can turn into significant gains over time in the world of finance. Keep planting those money seeds and watch them grow!
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