$316,160.00
Interest is the amount of money earned on an initial investment.
Simple Interest
Since the question does not talk about being compounded, we can assume the company is earning simple interest. Simple interest is the amount of money earned on the principal. The principal is the initial investment. Additionally, interest is earned at a specific rate; in this case, the rate is 5.2% each year.
Interest Formula
The formula to find the amount of interest earned is I = Prt. In this formula, I is the amount of interest earned, P is the principal, r is the rate as a decimal, and t is the time in years. To find the interest earned, all we need to do is plug in the information we know.
The account will earn $316,160 of interest.
We can also determine the total of the account by using the formula A = P (1 + rt). If we solve this formula, we can figure out that the account total is $1,076,160.
