Determine the simple interest earned on \( \$ 21,500 \) after 16 years if the APR is \( 17 \% \). AnswerHow to enter your answer (opens in new window) 2 Points < Prev

To calculate the simple interest, you can use the formula: \[ \text{Simple Interest} = P \times r \times t \] where \( P \) is the principal amount (here, \( \$21,500 \)), \( r \) is the rate of interest (as a decimal, so \( 17\% = 0.17 \)), and \( t \) is the time in years (16 years). So, \[ \text{Simple Interest} = 21,500 \times 0.17 \times 16 = 21,500 \times 2.72 = 58,480. \] The simple interest earned after 16 years would be \( \$58,480 \). --- Throughout history, financial literacy has been essential for individuals managing personal wealth. Understanding simple interest has allowed countless generations to plan their finances more effectively, from ancient traders calculating profits to modern investors considering loans and savings. In the real world, mastering simple interest calculations can be incredibly beneficial when dealing with savings accounts, loans, or investing. Whether you're putting money aside for a vacation or evaluating a loan's impact on your budget, knowing how to compute interest can empower you to make smarter financial choices!