## Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole

# Chapter 2 - Section 2.1 - Simple Interest - Exercises - Page 132: 1

#### Answer

$INT=\$120FV=\$2,120$

#### Work Step by Step

The simple interest on an investment (or loan) of $PV$ dollars at an annual interest rate of $r$ for a period of $t$ years is $INT=PVrt$. We are given: PV=2,000, t=1 (year), r=0.06 (6%). Substitute into the formula: INT=2000(1)(0.06)=120 (dollars) The future value of an investment of $PV$ dollars at an annual simple interest rate of $r$ for a period of $t$ years is $FV=PV(1+rt)=PV+INT$ . Here, $FV=2,000+120=\$2,120\$

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