If you invest $6,866 at an annual simple interest rate of 14% for 8 years, how much interest will you earn? Please write the answer in two decimal places.

Question

BlackTom AI · Accepted Answer

Here is the problem restated: If you invest $6,866 at an annual simple interest rate of 14% for 8 years, how much interest will you earn? Please write the answer in two decimal places.

First, identify the formula for simple interest: I = P × r × t, where P is the principal, r is the annual rate (as a decimal), and t is the time in years.

Plug in the given values: P = 6866, r = 0.14 (since 14% as a decimal), t = 8.

Compute r × t first: 0.14 × 8 = 1.12.

Now multiply by the principal: 6866 × 1.12.

Breaking that down: 6866 × 1.00 = 6866.00, and 6866 × 0.12 = 823.92 (since 6866 × 12/100 = 823.92).

Add the parts: 6866.00 + 823.92 = 7689.92.

Therefore, the interest earned over 8 years at 14% simple interest is 7689.92, to two decimal places.

Note on the provided value: the given answer 7685.12 does not match the correct calculation for I = P × r × t with the stated values, as 7689.92 is the result of applying the formula correctly to the given principal, rate, and time.

25400 Financial Literacy - Spring 2025 🔴 Practice Questions for In-class Quiz 1

If you invest $6,866 at an annual simple interest rate of 14% for 8 years, how much interest will you earn? Please write the answer in two decimal places.

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