Explanation:
a) To calculate the amount that Eric will receive after the 6 years, we need to use the formula for simple interest:
I = P * r * t
Where:
- I is the interest earned
- P is the principal amount (the initial investment)
- r is the interest rate (as a decimal)
- t is the time period (in years)
In this case, Eric invested $10,000 at an interest rate of 8% for 6 years. So we can plug in these values:
I = 10,000 * 0.08 * 6
I = 4,800
The interest earned is $4,800. To find the total amount that Eric will receive after the 6 years, we need to add the interest to the principal:
Total = P + I
Total = 10,000 + 4,800
Total = 14,800
Therefore, Eric will receive $14,800 after the 6 years.
b) The total interest that Eric will earn is already calculated in part a) and it is $4,800.