Question

In order to start a small business, a student takes out a simple interest loan for $2000.00 for 3 months at a rate of 12.25% The amount of interest is $61.25 The future value is?

Answer 1

Hello!

The formula to calculate the future value is:

`A=P\cdot(1+(r)/(100)\cdot t)`

As we know the values, let's replace them:

`\begin{gathered} A=2,000\cdot(1+0.1225\cdot0.25) \\ A=2,000\cdot(1+0.030625) \\ A=2,0000\cdot1.030625 \\ A=61.25 \end{gathered}`

`\begin{gathered} FV=i\cdot(1+(r\cdot t)) \\ FV=62.25\cdot(1+(0.1225\cdot0.25)) \\ FV=62.25\cdot(1+0.030625) \\ FV=62.25\cdot1.030625 \\ FV\cong64.156 \end{gathered}`