Question

A) Find the simple interest amount earned for $5500 at 6.5% for 5 months. b)What is the total value of the investment?

Answer 1

The simple interest I on an amount P invested at an interest rate R %, for a period of time T per annum is evaluated as

`I\text{ = }P* R* T`

A) The interest earned at $5500 at 6.5% for 5 months is thus evaluated as

`\begin{gathered} P\text{ = 5500} \\ R\text{ = 6.5\% = }(6.5)/(100) \\ T\text{ = 5 months = }(5)/(12)\text{ year} \\ thus, \\ I\text{ = }5500*(6.5)/(100)*(5)/(12) \\ \Rightarrow I\text{ = \$ 148.958} \end{gathered}`

thus, the interest earned for $5500 at 6.5% for 5 months is $ 148.985.

B) Total value of the investment.

The total value of the investment is the sum of the interest earned and the initial amount invested.

Thus,

`\begin{gathered} Total\text{ value of investment = interest earned + amount invested} \\ A\text{ = I + P} \\ A\text{ = 148.985 + 5500} \\ \Rightarrow A\text{ = \$ 5648.985} \end{gathered}`

Hence, the total value of the investment is $ 5648.985.