Final answer:
The total interest earned on a $24,000 investment at 7.2% interest is $1,728. Interest is calculated by multiplying the principal amount by the interest rate and the time period. Therefore, the correct answer is option 2) $1,728.
Step-by-step explanation:
The student asked about calculating the total amount of interest earned on a $24,000 investment that is earning 7.2% interest. To find the annual amount of interest earned, we use the simple interest formula, which is Interest = Principal × Rate × Time. Since we are looking for the interest earned over a single year (assuming it is for one year since the time period is not specified), the Time component will be 1.
Plugging the values into the formula we get:
Interest = $24,000 × 0.072 × 1
This calculation yields the total interest earned as:
Interest = $24,000 × 0.072 = $1,728
Therefore, option 2) $1,728 is the correct answer. This shows the power of interest rates in generating earnings on investments, and why it's important to consider the rate of return when investing your money.