Question

Lynne needs to borrow $9250 for cosmetic surgery she obtains a loan from her grandmother for 24 months at a simple interest rate of 7.1%. What is the loans future value?

Answer 1

Answer:

The loan's future value, FV = $10563.5

Explanations:

Let the amount borrowed by Lynned be the principal, P

P = $9250

The interest rate , r = 7.1%

r = 7.1 / 100

r = 0.071

Time, t = 24 months

12 months = 1 year

24 months = 2 years

t = 2 years

The future value is given by the formula:

FV = P ( 1 + rt)

FV = 9250 ( 1 + 0.071(2) )

FV = 9250 ( 1 + 0.142)

FV = 9250 ( 1.142)

FV = $10563.5