Given:
Principal - $12,000
Annual Interest Rate = 5.5% or 0.055 in decimal form
Time in years = 10 years
Find: simple interest and future value
Solution:
The formula for getting the simple interest is:
[tex]Interest=Principal\times Rate\times Time[/tex]Let's replace the variables in the formula with their corresponding numerical value.
[tex]Interest=12,000\times0.055\times10[/tex][tex]Interest=6,600[/tex]The interest after 10 years is $6, 600.
So, if the interest is 6,600, the future value of the money is:
[tex]FV=Principal+Interest[/tex][tex]FV=12,000+6,600[/tex][tex]FV=18,600[/tex]The future value of the deposited money after 10 years is $18, 600.
