Question

Hank decided to invest money into a retirement fund. If the average investment return is 12% and Hank invests the yearly maximum of $6,000 how much interest will that initial investment be worth in 20 years?

Answer 1

$14400

Explanation:

Using the formula for calculating the simple interest expressed as;

SI = Principal * Rate * Time/100

Given

Principal = $6000

Rate = 12%

Time = 20 years

Substitute into the formula;

SI = 6000 * 12 * 20/100

SI = 60*12*20

SI = 14,400

hence the interest worth after 20years will be $14400