Question

Compute the simple interest INT for the specified period and the future value FV at the end of the period.Round all answers to the nearest cent.$37,800 is invested for 6 months at 4% per year.INT= $ _____FV=$ _____

Answer 1

Explanation:

Simple interest is I = prt where I is the interest earned in dollars, p is the initial investment in dollars, r is the interest rate in decimal form, and t is time in years. For us,

p = 37800

r = .04 and

t = 1/2 (6 months is half a year)

I = 37800(.04)(.5) so

I = $756

The value of the account after that interest is

37800 + 756 = $38556