Question

If we invest $40,000 at 8% simple interest, how much will we have saved in 20 years?

Answer 1

$104,000

Explanation:

For simple interest,

I = Prt

where I = interest earned

P = principal, amount invested

r = annual interest rate

t = time in years

I = $40,000 × 0.08 × 20

I = $64,000

The total amount saved is the principal amount plus the interest.

$40,000 + $64,000 = $104,000