Question

1. A person invest $10,000 into an account that earns 6% in interest over 20 years.
   1. How much will this person make if the account earns simple interest?
   2. How much will this person make if the account earns compound interest?

3. Do you think super PACs benefit society or make things worse? Explain

Answer 1

1) Investment amount (P) = $10,000

Rate of Interest (r) = 6% = 0.06

Duration (n) = 20 years

1a) Interest earned in 20 years = P * n * r = 10,000 * 20 * 0.06 = 1,200

1b) Interest earned in 20 years = P * (1 + r)^ⁿ - P = 1,000 * (1 + 0.06)^²⁰ - 1,000 = 2,207.14

2) Super PAC (Political action committees) is used as a synonym with corruption. It results majority of population try supporting specific election candidate or political party. Super PACs can raise donations which they can spend without any limitation for campaigning which result in rich people gaining votes easily.