If you invest $13 500 for 18 months at 6.9% per annum simple interest,what is the value of your investment at the end of the 18 months?
A) $14 431.50
B) $14 897.25
C) $21 647.25
D) $22 815.00

Question

Quizplus · Accepted Answer

Using the formula for simple interest: 
I = Prt 
where I is the interest earned, P is the principal (initial investment), r is the interest rate per annum as a decimal, and t is the time period in years.

In this case, 
P = $13 500 
r = 0.069 (since 6.9% is the same as 0.069 as a decimal) 
t = 1.5 years (since 18 months is 1.5 years)

I = (13 500)(0.069)(1.5) 
I = $1407.75

To find the value of the investment at the end of the 18 months, we add the interest earned to the initial investment:

Value = P + I 
Value = $13 500 + $1407.75 
Value = $14 907.75

The closest option to this value is choice B, $14 897.25.

If You Invest $13 500 for 18 Months at 6