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?$10,074.23$9,954.00$9,376.85$10.756.43None of these choices are correct.

Answer 1

Step 1: Use the formula below to find the future value:

Fv = P + Prt

P = present value or initial deposit

r = rate in %

t = time in years

Step 2: List the given data

P = $7900

r = 6.5% = 0.065

t = 4 years

Step 3: Substitute the values of P, r and t to find the future value.

FV = P + Prt

= 7900 + 7900 x 0.065 x 4

= 7900 + 2054

= $9954.00

Stop 4: Final answer

Future value = $9954.00