Respuesta :
The amount earned less by Orlando if he had made his early withdrawal is $3,727.50
Computation:
Given,
Principal amount =$16,000
Simple interest rate =6.5%
Time period =8 years
Future value =$3,500, after 5 years
The formula of future value will be used to determine the difference amount earned irrespective of the early payments.
[tex]\begin{aligned}F&=P+(P\times i \times t)\\&=\$16,000+\$16,000\times0.065\times8\\&=\$24,320\end{aligned}[/tex]
Now, the same formula will be used for the payment received after 5 years.
[tex]\begin{aligned}F_1&=F-[\text{Withdrawal}-(\text{Withdrawal}\times i )]\\&=\$24,320-[\$3,500-\$3,500\times0.065\\&=\$20,592.50\end{aligned}[/tex]
The amount earned less is the difference between the future value of the principal and the future value of the withdrawn amount.
[tex]\begin{aligned}\text{Amount}&=F-F_1\\&=\$24,320-\$20,592.50\\&=\$3,727.50\end{aligned}[/tex]
Therefore, the given options are incorrect and the correct amount is $3,727.50 that is less money Orlando earned in total without the early payments.
To know more about future value, refer to the link:
https://brainly.com/question/1759639
