If a person invests $120 at 8% annual interest, find the approximate value of the investment at the end of 5 years.
2 answers:
Not certain if you are seeking simple interest or compound interest
If it's simple, then refer to AAAAAAAAAA
If it's compound, check BBBBBBBB
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simple interest
I=PRT
interest=I
P=principal=amount invested
R=rate expressed as a decimal
t=time in years
Given
P=120
R=8%=0.08
t=5
Thus,
I=(120)(0.08)(5)=48
Total investment, consisting of interest plus principal, is 48+120=$168
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For compound interest calculated yearly
A=final amount
P=principal
r=rate expressed as a decimal
t=time in years
Given
P=120
r=8%=0.08
t=5
Calculate using a calculator
A=176.319
Rounded to the nearest cent,
A=$176.32
Therefore,
if using simple interest, the investment totals $168
if using compound interest, the investment totals $176.32
If it's simple, then refer to AAAAAAAAAA
If it's compound, check BBBBBBBB
AAAAAAAAAA
simple interest
I=PRT
interest=I
P=principal=amount invested
R=rate expressed as a decimal
t=time in years
Given
P=120
R=8%=0.08
t=5
Thus,
I=(120)(0.08)(5)=48
Total investment, consisting of interest plus principal, is 48+120=$168
BBBBBBBBBBBBB
For compound interest calculated yearly
A=final amount
P=principal
r=rate expressed as a decimal
t=time in years
Given
P=120
r=8%=0.08
t=5
Calculate using a calculator
A=176.319
Rounded to the nearest cent,
A=$176.32
Therefore,
if using simple interest, the investment totals $168
if using compound interest, the investment totals $176.32
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