If $12,000 is invested at 6.8% simple annual interest, find the investment's future value in 8 years.
Mathematics · Middle School · Tue Nov 03 2020
Answered on
Given:
Principal Amount (P) = $12,000
Rate ( r ) = 6.8% or 0.068
Term (t) = 8 years
Formula for Simple Interest:
I = Prt
Formula for Future Value of Simple Interest.
A = P(1 + rt)
Solution:
Since we are asked to find the future value of the simple interest then we simply used the formula for the future value of simple interest.
A = P( 1 + rt)
A =$12,000 ( 1 + (0.068)(8))
A = $12000 ( 1.544)
= $18,528
Final answer:
Future Value: $18,528