Question

Newman Jackson invests $53,200 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Newman withdraws the accumulated amount of money.

Compute the amount Newman would withdraw assuming the investment earns simple interest. (Round answers to 0 decimal places, e.g. 458,581.)
Total withdrawn $ _____

Answer 1

Using the simple interest formula, Newman Jackson would earn $339,200 in interest over 8 years on a principal of $53,200 at an 8% annual interest rate. Adding this to the principal, he would withdraw a total of $392,400 at the end of 8 years.

Step-by-step explanation:

To calculate the total amount Newman Jackson would withdraw, including the simple interest accrued over 8 years, we use the formula for simple interest: Interest = Principal × Rate × Time.

Where:

• Principal (P) is the initial amount invested, which is $53,200.
• Rate (R) is the annual interest rate, which is 8% or 0.08 in decimal form.
• Time (T) is the number of years the money is invested, which is 8 years.

The interest Newman will earn is calculated as follows:

Interest = $53,200 × 0.08 × 8

Interest = $339,200

To find the total amount Newman will withdraw, we add the interest to the principal:

Total amount = Principal + Interest = $53,200 + $339,200

Total amount = $392,400 (rounded to 0 decimal places)

Therefore, Newman would withdraw $392,400 at the end of the 8 years.