What is the amount of interest earned from this investment?

Round to the nearest cent

To calculate the amount of interest earned, we subtract the initial principal from the accumulated value of the investment.

\[
\text{Interest Earned} = A - P
\]

Where:
- $ A $ is the accumulated value of the investment (which we've already calculated as \$10,911.45).
- $ P $ is the initial principal (\$10,000).

Let's compute the interest earned.The amount of interest earned from this investment is **$911.45**.

Would you like any more details on this calculation or have any further questions?

Here are some related questions:
1. What is the difference between the interest earned with simple interest and compound interest?
2. How much interest would Erin earn if the investment period was 5 years?
3. How does changing the compounding frequency affect the interest earned?
4. What would be the interest earned with a higher interest rate, say 3%?
5. How does the interest earned change if the principal amount was $15,000 instead?
6. What would be the impact on interest if Erin withdrew part of the investment after 2 years?
7. How does inflation impact the real value of the interest earned?
8. What is the formula for calculating simple interest, and how does it differ from compound interest?

**Tip:** The longer the investment period, the greater the effect of compound interest, leading to more interest earned over time.

Learn how to calculate the amount of interest earned from an investment with a detailed step-by-step solution. This problem covers key concepts in interest calculation, including principal and accumulated value. Suitable for high school students.

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