Thinking Mathematically (6th Edition)

Published by Pearson
ISBN 10: 0321867327
ISBN 13: 978-0-32186-732-2

Chapter 8 - Personal Finance - 8.3 Simple Interest - Exercise Set 8.3: 9

Answer

The loan's future value is $\$3420$

Work Step by Step

This is the formula we use when we make calculations with simple interest: $A = P~(1+rt)$ $A$ is the future value $P$ is the principal $r$ is the interest rate $t$ is the number of years We can find the value of the loan with an interest rate of 7% for 2 years. $A = P~(1+rt)$ $A = (\$3000)~[1+(0.07)(2)]$ $A = \$3420$ The loan's future value is $\$3420$
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