Question

An investor puts $1760.25 into 2 an insurance policy that pays 6.5% simple annual interest. if no additional investment is made into the policy, how much interest should the investor expect at the end of 15 years? (Round to the nearest cent.)

Answer 1

The interest amount is $1716.24.

Given:

Principal amount is, P = $1760.25.

Rate of intereset is, r = 6.5% = 0.065

Number of years is, n = 15.

The objective is to find the expected interest amount at the end of 15 years.

The formula to find the simple interest is,

$A=p\cdot n\cdot r$

Now, substitute the given values in the above formula.

$\begin{gathered} A=1760.25\times15\times0.065 \\ A=1716.24 \end{gathered}$

Hence, the expected interest amount is $1716.24.