Answer:
The interest on the investment is $16,170.93811
Step-by-step explanation:
The rule of the compound interest is [tex]A=P(1+\frac{r}{n})^{nt}[/tex], where
- n is the number of periods in time
∵ The investment is $45,000
∴ P = 45,000
∵ The interest on the investment is compounded annually at 5.25%
∴ r = 5.25% = 5.25 ÷ 100
∴ r = 0.0525
∴ n = 1 ⇒ compound annually
∵ It is for 6 years
∴ t = 6
→ Substitute them in the rule above
∵ [tex]A=45,000(1+\frac{0.0525}{1})^{1(6)}[/tex]
∴ [tex]A=45,000(1.0525)^{6}[/tex]
∴ A = 61,170.93811
∵ I = A - P, where I is the interest
∴ I = 61,170.93811 - 45,000
∴ I = 16,170.93811
∴ The interest on the investment is $16,170.93811
