Question

Upon graduation, Ayla is given a gift of $4700. If this money is invested at 3.5%simple interest, find the total value of the investment after 7 years.

Answer 1

We have to use the formula for simple interest to find the corresponding value in the future:

`FV=PV\cdot(1+in)`

We have that:

• PV = $4700.

,

• i = 3.5%

,

• n = 7

Then, we have:

`FV=4700\cdot(1+(3.5)/(100)\cdot7)\Rightarrow FV=4700\cdot(1+0.245)\Rightarrow FV=4700\cdot(1.245)`

Thus

`FV=5851.5`

Then, the total value of the investment after seven years will be $5851.50.