Welcome to Westonci.ca, where curiosity meets expertise. Ask any question and receive fast, accurate answers from our knowledgeable community. Join our platform to connect with experts ready to provide precise answers to your questions in various areas. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

A retired couple invested $12000 in bonds at a simple interest rate of 5%. At the end of one year, how much interest did they receive on their investment?

Sagot :

The simple interest formula is

[tex]A=P(1+rt)[/tex]

Where A is the final amount, P is the initial principal balance, r is the annual interest rate and t is the time in years.

In our case, (5%=0.05)

[tex]A=12000(1+0.05\cdot1)=12000\cdot(1.05)=12600[/tex]

In total, they received $12600 at the end of the year, and 12600-12000=$600 are purely interest.