Assuming that the given condition is evaluated with simple interest, the resultant value of the investment will become $12,000.
Given that:
- The principal amount = $5000
- The rate of interest = 7%
- Investment duration = 20 years.
To find:
- Final value of investment.
Calculations:
If the simple interest rate is R% per annum invested for T years and the principal amount is P, then the total resultant amount at the end of T years time is given by:
[tex]A = P + SI = P + \dfrac{P\times R \times T}{100} = P(1 + \dfrac{RT}{100})[/tex]
Thus, we have:
[tex]A = 5000( 1 + \dfrac{7 \times 20}{100})\\\\A = 5000 \times \dfrac{12}{5}\\\\A = \$12,000[/tex]
Thus, the resultant value of the investment will become $12,000.
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