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?

Answer 1

Answer:

$2125 interest  accumulated at the end of 10 years .

Step-by-step explanation:

Formula

$Simple\ inerest = \frac{Principle\times Rate\times Time}{100}$

As given

An investor puts $2,500 into a life insurance policy that pays 8.5% simple annual interest.

Principle = $2500

Rate = 8.5 %

Time = 10 years

Putting all the values in the formula

$Simple\ inerest = \frac{2500\times 8.5\times 10}{100}$

$Simple\ inerest = 25\times 8.5\times 10$

Simple interest = $ 2125

Therefore the $2125 interest  accumulated at the end of 10 years .