Paula invests $10,000 for 5 years at an interest rate of 10% per year. If the interest is simple interest, how much is her investment worth at the end of those five years?
$10,000 x 10% x 5 years =$5,000 Simple interest earned over 5 years.
$10,000 + $5,000 = $15,000 Total principal + interest over 5 years.
Principal + Simple Interest =
10000 + 10000 ( interest rate) ( time in years) =
10000 + 10000(.10)(5) =
10000 + 5000 =
$15000 after five years
