Question

Find the interest and future value of a deposit of $6250 at 3.5% simple interest for eight years. Interest = $ Future Value = $

Answer 1

The simple interest is given by the following formula:

`I=Prt`

Where "P" is the deposit, "r" is the interest rate in decimal form, and "t" is time. Now, we plug in the values:

`I=(6250)(0.035)(8)`

Now, we solve the operations:

`I=1750`

therefore, the interest is $1750.

To deteremine the future value we add the deposit to the interest, we get:

`A=P+Prt`

Now, we plug in the values:

`\begin{gathered} A=6250+1750 \\ A=8000 \end{gathered}`

Therefore, the future value is $8000