Question

Suppose your friend's parents invest $15,000 in an account paying 7% compounded annually. What will the balance be after 10 years?

Answer 1

$25,500

Explanation:

First, converting R percent to r a decimal

r = R/100 = 7%/100 = 0.07 per year,

then, solving our equation

I = 15000 × 0.07 × 10 = 10500

I = $ 10,500.00

The simple interest accumulated

on a principal of $ 15,000.00

at a rate of 7% per year

for 10 years is $ 10,500.00.