Question

Find the interest and future value of a deposit of $12,000 at 5.5% simple interest for 10 years.

Answer 1

Given:

Principal - $12,000

Annual Interest Rate = 5.5% or 0.055 in decimal form

Time in years = 10 years

Find: simple interest and future value

Solution:

The formula for getting the simple interest is:

`Interest=Principal* Rate* Time`

Let's replace the variables in the formula with their corresponding numerical value.

`Interest=12,000*0.055*10`
`Interest=6,600`

The interest after 10 years is $6, 600.

So, if the interest is 6,600, the future value of the money is:

`FV=Principal+Interest`
`FV=12,000+6,600`
`FV=18,600`

The future value of the deposited money after 10 years is $18, 600.