Question

Find the interest and future value of a deposit of $8,750 at 3% for twenty years.

Answer 1

Interest = $5,250

Future value = $14,000

Step-by-step explanation

Given:

Principal, P = $8,750

Rate, R = 3%

Time, T = 20 years

What to find:

The interest and future value.

Step-by-step solution:

The Interest

The interest can be calculated using the simple interest formula below.

`Interest=(P* R* T)/(100)=(\$8,750*3*20)/(100)=\$5,250`

The interest of $8,750 at 3% for twenty years is $5,250

The future value

Future value = Amount = Principal + Interest

Future value = $8,750 + $5,250

Future value = $14,000