Question

A person won $900,000 as a game show contestant and invests this money for 4 years and 6 months at an interest rate of 5% (simple interest). How much will the person have in principal and interest at the end of the investment?

Answer 1

Simple interest formula:

Where
I = Simple interest
P = Principal invested
R = Rate of interest
T = Time in years

Note that time is given as 4 years and 6 months, which means 4 and one-half years. Or 4.5 years.

Therefore,

Therefore, amount at the end of the investment period, that person will have an amount, which is;

= Principal invested + Inerest

= $900,000 +  $202,500

=  $1,102,500