Answer:
Future value using simple interest = $10,880
Future value using Compound interest = $11,240 (Approx.)
Explanation:
Given:
Principal Amount = $8,000
Rate = 12% = 0.12
Number of year = 3
Find:
Future value
Computation:
Future value using simple interest
Future value = P + (P)(R)(T)
Future value = 8,000 + (8,000)(0.12)(3)
Future value = 8,000 + 2,880
Future value using simple interest = $10,880
Future value using Compound interest
Future value = P[1+r]ⁿ
Future value = 8,000[1+0.12]³
Future value = 8,000[1.12]³
Future value using Compound interest = $11,240 (Approx.)