$600 at a rate of 2% per year simple interest.Calculate the value of Ali’s investment at the end of 5 years
Question
$600 at a rate of 2% per year simple interest.Calculate the value of Ali’s investment at the end of 5 years
Solution
To calculate the value of Ali's investment at the end of 5 years, we need to use the formula for simple interest which is:
I = PRT
where: I = Interest P = Principal amount (the initial amount of money) R = Rate of interest T = Time (in years)
In this case, P = $600, R = 2% (or 0.02 as a decimal), and T = 5 years.
First, calculate the interest:
I = PRT I = 60
The value of the investment at the end of 5 years is the sum of the initial principal and the interest earned:
Value = P + I Value = 60 Value = $660
So, the value of Ali's investment at the end of 5 years would be $660.
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