K3000 is invested at an interest rate of 7% per annum compounded annually for 5 years. How much interest is generated from this investment?

Answer 1

To calculate the amount of interest generated from the investment, we can use the formula:

Interest = Principal × (1 + Rate/100)^Time - Principal

Where:
Principal = K3000
Rate = 7%
Time = 5 years

Let's plug in the values into the formula:

Interest = K3000 × (1 + 7/100)^5 - K3000
= K3000 × (1.07)^5 - K3000

Calculating the value:
Interest = K3000 × 1.403 - K3000
= K4209 - K3000
= K1209

Therefore, the interest generated from this investment is K1209.