Understanding Interest Practice

Question

Complete this assessment to review what you've learned. It will not count toward your grade.
2 of 52 of 5 Items
Question
To prepare for retirement, Chris invests $15,000 with a simple interest rate of 4.8%. Find the final amount of Chris’s investment if he invests this amount for the next 30 years. Round the answer to two decimal places as needed.(1 point)
The final amount of Chris’s investment is $
.
Remaining Attempts : 3

Answer 1

To calculate the final amount of Chris's investment using simple interest, you can use the formula:

\[ A = P(1 + rt) \]

where:

• \( A \) is the final amount,
• \( P \) is the principal amount (initial investment),
• \( r \) is the annual interest rate (in decimal form),
• \( t \) is the time the money is invested for (in years).

In this case:

• \( P = 15,000 \)
• \( r = 4.8% = 0.048 \)
• \( t = 30 \)

Now, plug in the values:

\[ A = 15000(1 + (0.048 \times 30)) \]

\[ A = 15000(1 + 1.44) \]

\[ A = 15000(2.44) \]

\[ A = 36600 \]

The final amount of Chris's investment after 30 years is $36,600.00.