Question

Ernestine deposited $6800 into a savings account that earns 3.5% simple interest each year calculate annually what is the future value of understands account to 16 years

Answer 1

`\$10,608`

Explanation:

we know that

The simple interest formula is equal to

`A=P(1+rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=16\ years\\ P=\$6,800\\r=0.035`

substitute in the formula above

`A=\$6,800(1+0.035*16)=\$10,608`