a) At the simple interest rate, after 7 years, Riley will earn a total interest of $875.
b) After those 7 years, Riley's investment will be worth $5,875.
The simple interest system is unlike the compound interest which compounds the interest together with the principal.
The simple interest computes the periodic interest based on the principal alone.
The amount invested by Riley and Louise, respectively = $5,000
The simple interest rate = 2.5%
Period of investment = 7 years
a) The total interest for 7 years = $875 ($5,000 x 2.5% x 7)
b) The worth of the investment after 7 years = $5,875 ($5,000 + $875)
Complete Question:
Riley and Louie each have $5,000 to invest. They both invest at a 2.5% simple interest rate. Part A 2 Riley keeps her money invested for 7 years. How much interest will she earn? Show your work. After those 7 years, how much will her investment be worth? Show your work.