Question

An investor puts $2,500 into a life insurance policy that pays 8.5% simple annual interest. If no additional investment is made into the policy, how much accumulated interest should the investor expect at the end of 10 years?

A) $21,250.00
B) $2,125.00
C) $212.50
D) $21.25

Answer 1

B is the correct answer

Explanation:

Answer 2

Answer: Option 'B' is correct.

Explanation:

Since we have given that

Principal amount (P)= $2500

Rate of simple annual interest (R) = 8.5%

Number of years (T)= 10

As we know the formula for "Simple Interest ":

`Interest=(P* R* T)/(100)\\\\Interest=(2500* 8.5* 10)/(100)\\\\Interest=\$2125.00`

Hence, Option 'B' is correct.