Question

First Reunion bank is offering 7% simple interest annually. If you invest $5,000 dollars, how much money will you have after 14 years?

Answer 1

After investing $5,000 at a 7% annual simple interest rate, you will have $9,900 after 14 years.

Step-by-step explanation:

The question is about calculating the future value of an investment using simple interest. To find out how much money you will have after 14 years when you invest $5,000 at a 7% simple interest rate annually, you can use the formula for simple interest: Future Value = Principal × (1 + (Interest Rate × Time)). In this case, the principal is $5,000, the interest rate is 7% or 0.07 per year, and the time is 14 years.

So, the calculation will be:

Future Value = $5,000 × (1 + (0.07 × 14))
Future Value = $5,000 × (1 + 0.98)
Future Value = $5,000 × 1.98
Future Value = $9,900

Hence, after 14 years, you would have $9,900 with a 7% annual simple interest rate on a $5,000 investment.