Question
Calculate the amount of money you'll have at the end of the indicated time period. You invest \( \$ 1000 \) in an account that pays simple interest of \( 2 \% \) for 30 years. The amount of money you'll have at the end of 30 years is \( \$ \square \)
Ask by Lang Cervantes. in the United States
Feb 22,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
At the end of 30 years, you will have \$1600.
Solution
To calculate the final amount with simple interest, use the formula:
Total Amount = Principal + (Principal × Rate × Time)
Here, the Principal is $1000, the Rate is 2% (or 0.02 as a decimal), and the Time is 30 years.
Step 1: Compute the interest earned:
Interest = 1000 × 0.02 × 30 = $600
Step 2: Add the interest to the principal:
Total Amount = 1000 + 600 = $1600
Thus, at the end of 30 years, you will have $1600.
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Simplify this solution Extra Insights
To calculate the amount of money you'll have at the end of 30 years with simple interest, you can use the formula: \[ A = P + (P \times r \times t) \] where: - \( A \) = total amount after time \( t \) - \( P \) = principal amount (\$1000) - \( r \) = annual interest rate (2\% = 0.02) - \( t \) = time in years (30 years) Plugging in the values: \[ A = 1000 + (1000 \times 0.02 \times 30) \] \[ A = 1000 + (1000 \times 0.6) \] \[ A = 1000 + 600 \] \[ A = 1600 \] So, the amount of money you'll have at the end of 30 years is \( \$ 1600 \).
