Final answer:
The simple interest earned on a $1000 investment at 18% for 4 years is $720, calculated using the simple interest formula.
Step-by-step explanation:
The simple interest earned on $1000 invested at 18% for 4 years can be calculated using the simple interest formula, which is principal ($P) times the interest rate (r) times the number of years (t). In mathematical terms, this is represented as Simple Interest = P * r * t. So, for your case:
- Principal ($P) = $1000
- Interest rate (r) = 18% or 0.18 in decimal
- Number of years (t) = 4 years
Using the formula, we calculate simple interest as follows:
Simple Interest = $1000 * 0.18 * 4 = $ 720
Therefore, the correct answer is a. $720.