Question

Find the simple interest and the future value for principal amount $6000, rate 4%, and time 1 year. The simple interest is $The future value is $

Answer 1

We have the following equation to find the simple interes:

$I=P\cdot n\cdot r$

where P is the principal amount, r is the rate and n is the time period.

In this case, we have the following:

$\begin{gathered} P=6000 \\ n=4\%=0.04 \\ n=1 \\ \Rightarrow I=6000\cdot0.04\cdot1=240 \\ I=240 \end{gathered}$

thus, the interest after 1 year is $240.

To find the future value, we can add the interest to the principal amount to get:

$F=6000+240=6240$

therefore, the future value is $6240