Question

What is the future value of $10,000 on deposit for 2 years at 6% simple interest?

a) $11,236
b) $11,200
c) $10,600
d) $13,382.26

Answer 1

The future value of $10,000 deposited for 2 years at 6% simple interest is $11,200. This can be calculated using the formula: Future Value = Principal(1 + (interest rate * time)).

Step-by-step explanation:

To calculate the future value of $10,000 on deposit for 2 years at 6% simple interest, you can use the formula:

Future Value = Principal(1 + (interest rate * time))

Substituting the given values into the formula, we have:

Future Value = $10,000(1 + (0.06 * 2))

Simplifying the calculation, we get:

Future Value = $10,000(1.12) = $11,200.

Therefore, the correct answer is $11,200 (Option B).