Question

Find the future value of 18,600$ loan at 4.1% simple interest for 10 months

Answer 1

Explanation

We are given the following:

`\begin{gathered} P=\text{ \$}18,600 \\ r=4.1\%=0.041 \\ t=10months=(10)/(12)yr \end{gathered}`

We are required to determine the future value using the given information above.

This is achieved thus:

The future value formula for simple interest is given as:

`\begin{gathered} A=P(1+rt) \\ where \\ A=future\text{ }amount \\ P=principal\text{ }amount \\ r=simple\text{ }interest\text{ }rate\text{ }in\text{ }decimal\text{ }form \\ t=number\text{ }of\text{ }time\text{ }periods \end{gathered}`

Therefore, we have:

`\begin{gathered} A=18600(1+0.041\cdot(10)/(12)) \\ A=19235.5 \end{gathered}`

Hence, the answer is:

$19,235.50