What is $25,000 at 8% for 5 years?

1 Answer
May 31, 2017

Answer:

#$35000#.

Explanation:

Although there is no context, there is no mention of "compounding" and annuities (words like "monthly payment" indicates an annuity). Therefore, the only formula we can use is #I=Prt#.

=> Where #I# is the interest - money earned.
=> Where #P# is the principal - money deposited.
=> Where #R# is the rate - given as a decimal.
=> Where #T# is the time (years).

#I=P*R*T#

#I=25000 xx 0.08 xx 5#

#I=10000#

Now we add the interest to the deposited principal to get the total.

#T=P+I#

#T=25000+10000#

#T=35000#

Therefore, after #5# years, the investment is worth #$35000#.

Hope this helps :)