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If $7,000 is invested in an account for 25 years. Calculate the total interest earned at the end of 25 years if the interest is: (a) 5% simple interest: $ (b) 5% compounded annually: $ (c) 5% compounded quarterly: $ (d) 5% compounded monthly: $ Round your answers to the nearest cent. Question Help: Video Submit Question Question 12

          If $7,000 is invested in an account for 25 years. Calculate the total interest earned at the end of 25 years if the interest is:
(a) 5% simple interest: $
(b) 5% compounded annually: $
(c) 5% compounded quarterly: $
(d) 5% compounded monthly: $
Round your answers to the nearest cent.
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Question 12

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If 7,000 is invested in an account for 25 years. Calculate the total interest earned at the end of 25 years if the interest is:
(a) 5% simple interest: $
(b) 5% compounded annually: $
(c) 5% compounded quarterly: $
(d) 5% compounded monthly: $
Round your answers to the nearest cent.
Question Help: Video
Submit Question
Question 12

Added by Samantha F.

Elementary and Intermediate Algebra

Alan S. Tussy, R. David Gustafson 5th Edition

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Solved by Expert Eduard Sanchez

09/29/2023

Step 1

Step 1: The formula for simple interest is I = Prt, where I is the interest, P is the principal, r is the interest rate, and t is the time in years. Show more…

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If $7,000 is invested in an account for 25 years. Calculate the total interest earned at the end of 25 years if the interest is: (a) 5% simple interest: $ Enter an integer or decimal number (more.. (b) 5% compounded annually: $ (c) 5% compounded quarterly: S (d) 5% compounded monthly: $ Round your answers to the nearest cent. Question Help: Video Submit Question O Question 12 0/2 pts34 Details

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00:01 Hi there, so for this problem, we are told that if 28 ,000 dollars is invested in an account for 10 years.

00:11 Then, so this will give us the present value that will be then 28 ,000.

00:18 And this for a time that is equal to.

00:25 So, for part of this problem, we are told that in this case is 8%.

00:32 But this is in a simple interest now, the formula for the simple interest is that a future value.

00:39 Is just the present value times 1 plus the rate, which is this in decimal.

00:45 So that will be 0 .08.

00:47 This times the time, so we just need to substitute the values in here.

00:52 So that will be at 23 ,000.

00:55 I'm not sorry.

00:56 28 ,000.

00:59 This times 1 plus the rate.

01:03 Times 10 and this will give us.

01:30 1 ,400 in the next case, case b.

01:44 We have so the rate again is 0 .08 because the interest rate is 8%.

01:51 But in this case is compounded annually and the formula for compounded annually.

01:58 Is just simply that the future value is the present value times 1 plus the rate and this elevated to the time.

02:06 So, let's just do the values 28 ,000, then this times.

02:12 1, plus the rate that is 0 .08 and then this elevated to 10.

02:18 10 years, so this will give us...

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