Jonathan invested $6,220 in an account that pays 11 percent simple interest. How much money will he have at the end of 40 years?

Question

BlackTom AI · Accepted Answer

First, let's identify the key givens and the formula we should use. The problem involves simple interest, with principal P = 6,220, annual rate r = 11% (0.11), and time t = 40 years. The simple interest formula is I = P × r × t, and the amount accumulated at the end is A = P + I.

Option A: $106,905. This number is far larger than what you get from straightforward calculation. If we reverse-engineer, it would imply an interest of about $100,685, which would require a much higher rate or time than provided. Since r × t = 0.11 × 40 = 4.4, the growth factor is 4.4, and adding back the original principal would yield 6,220 × (1 + 4.4) = 6,220 × 5.4, which equals $33,588, not $106,905. Therefore, this option is incorrect.

Option B: $404,305. This value would correspond to a very large growth over 40 years under simple interest, far exceeding the correct calculation. Using the correct growth factor 5.4 for the amount (1 + rt), we get 6,220 × 5.4 = 33,588. The suggested total of 404,305 is inconsistent with simple interest for the given rate and time, so this option is incorrect.

Option C: $408,671. Similar to Option B, this figure implies an excessive accumulation for simple interest with the given parameters. The correct accumulation factor is 1 + rt = 1 + 4.4 = 5.4, leading to 6,220 × 5.4 = 33,588. Therefore, this option is also incorrect.

Option D: $33,588. This matches the correct computation exactly. Compute interest: I = 6,220 × 0.11 × 40 = 6,220 × 4.4 = 27,368. Then total A = P + I = 6,220 + 27,368 = 33,588. This aligns with the simple-interest formula and the given values, so this option is correct.

33:390:300:13 FINANCIAL MANAGEMENT Exam 1- Requires Respondus LockDown Browser

Jonathan invested $6,220 in an account that pays 11 percent simple interest. How much money will he have at the end of 40 years?

查看解析

登录即可查看完整答案

类似问题

A payday loan company charges 3.6 percent interest for a four-week period. What would be the annual interest rate from that company? Note: Assume an even 52 weeks per year. Enter your answer as a percent rounded to 1 decimal place. BlackTom题目解析

What is the total amount after 2 years if $3,030 is invested at a 6% annual simple interest rate? Please write the answer in two decimal places.

What is the total amount after 9 years if $10,301 is invested at a 8% annual simple interest rate? Please write the answer in two decimal places.

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.

Henry bought an antique watch for $6,000 and sold it 9-months later for $6,360. What simple interest rate did he earn on this sale?

What is the formula for calculating simple interest?

Stella deposits $4,500 in a savings account at a bank that offers interest of 4.7% on such accounts. What is the value of the money in her savings account in one year's time?

Mrs. Cheng invested $30,000 split into two accounts; one that earns 5% interest and the other earns 8% interest. The total interest on the investment was $2100. How much did she invest at a rate of 8%?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单