Question

You have $5,000 to invest for ten years. The Bank pays simple interest at an annual rate of 5%. Calculate your balance after 10 years.

Answer 1

Answer: $7,500

Explanation:

Use the formula: SI = P(1 + rt)

SI = 5000(1 + 0.05[10])

SI = 5000 + 2500

SI = $7,500

After 10 years, your balance should be $7,500