Question

Lee put $5,000 into a stock market index mutual fund that grew at an average of 6. 5% per year for 10 years. Without any added deposits or withdrawals, about how much is in Lee's mutual fund account after only 8 years, if you ignore compounding?.

Answer 1

The total amount of money Lee would have at the end of 8 years is $7,600.

Definition of simple interest

Simple interest is interest that is earned only on the amount of money deposited. In order to determine the amount of money Lee would have at the ned of 8 years, it would be the sum of simple interest earned and the amount deposited,

Calculation of simple interest

Simple interest = principal x time x interest rate

$5000 + 0.065 x 8 = $2,600

Total sum of money = $2,600 + 5000 = $7,600

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