Question

You invested $52.400 at 6% compounded annually for 5 years. What is your total return on this investment

Answer 1

$15,720

General Formulas and Concepts:

Pre-Algebra

Order of Operations: BPEMDAS

1. Brackets
2. Parenthesis
3. Exponents
4. Multiplication
5. Division
6. Addition
7. Subtraction

• Left to Right

Algebra I

Simple Interest Rate Formula: A = P(1 + rt)

• P is principle amount
• r is rate
• t is time

Explanation:

Step 1: Define

Identify variables.

P = $52,400

r = 6%

t = 5

Step 2: Find Current Investment Value

1. Substitute in variables [Simple Interest Rate Formula]: A = 52,400(1 + 0.06 · 5)
2. [Order of Operations] Evaluate: A = $68,120

Step 3: Find Total Return

1. Set up: R = A - P
2. Substitute in variables: R = 68,120 - 52,400
3. [Order of Operations] Evaluate: R = $15,720