Question

don invested $ 5 000 in an account paying 5% simple interest per year for 7 years. a) how much interest will don earn at the end of 7 years?b) how much will be in Don's account at the end of 7 years?

Answer 1

Results are below.

Explanation:

Giving the following information:

Initial investment (P)= $5,000

Interest rate (r)= 5% simple interest

Number of periods (t)= 7 years

To calculate the interest earned, we need to use the following formula:

I= P*r*t

I= 5,000*0.05*7

I= $1,750

To calculate the future value of the investment, we need to use the following formula:

FV= I + P

FV= 1,750 + 5,000

FV= $6,750