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A loan of $2000 was made at 5.5% for four months.
Find the loan's future value.

User Dguay
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1 Answer

4 votes

Final answer:

The future value of the loan is $2036.67.

Step-by-step explanation:

To find the future value of a loan, you can use the formula:

Future Value = Principal + Simple Interest

In this case, the principal is $2000 and the interest rate is 5.5%. The loan lasts for four months, so the time period is 4/12 = 1/3 of a year.

Step 1: Calculate the simple interest. Simple interest is calculated using the formula:

Simple Interest = Principal * Rate * Time

In this case, the simple interest is $2000 * 0.055 * 1/3 = $36.67

Step 2: Calculate the future value of the loan:

Future Value = $2000 + $36.67 = $2036.67

User Anurag Rana
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