Question

Given the formula FV = P + Prt, what is the future value of a savings account that had an initial deposit of $7,900 earning 6.5% simple interest for 4 years?

Answer 1

For alculation of future value:

`FV=P+P\cdot r\cdot t`
`\begin{gathered} P=7900\text{ (Initial deposit)} \\ r=0.065\text{ (6.5\% simple interest)} \\ t=4\text{ years (Time)} \end{gathered}`

Then, the future value will be calculated as follows:

`FV=7900+(7900\cdot0.065\cdot4)=9954`

With an initial deposit of $7900, after 4 years with 6.5% simple interest, the ea