Question

Today, you open a new savings account and deposit $3,000. No other deposits or withdrawals are made to your account. Assume you will earn 4% simple interest per year. How much will your investment be worth in 25 years?

Answer 1

Here given,

Principal Amount (P) = $ 3,000
Time (T) = 25 years
Rate of Interest (R) = 4% p.a.

Interest = P*T*R/100
= $ 3,000* 25* 4/ 100
= $ 3,000

Now, Amount= Principal + Interest
= $ 3,000 + $ 3,000
= $ 6,000
Therefore, the investment will be worth $ 6,000 in 25 years.