Question

How much simple interest would be earned on an

investment of $16,000 if the money is invested for
20 years at an annual interest rate of 5.25%?

Answer 1

$16,800

Explanation:

The simple interest formula is given as under

I = PRT

where

I is interest which we need to find

P is principle = $16000

R is rate of Interest = 5.25% = 0.0525

T is the time = 20 years

Substituting these values in the formula we get

I = 16000 x 0.0525 x 20

I = 16800

Hence the interest earned will be $16800