Question

You plan to invest $6,500 for three years at 4 percent simple interest. what will your investment be worth at the end of the three years?

Answer 1

In this problem, you are looking for the future value of your investment at the end of three years. Here are the given in the problem:

Principal (P) = $6,500

Rate (r) = 4%

Time (t) = 3 years

We shall be using this formula to compute the problem where A is the future value of the investment.

A = P (1 + rt)

Substituting the amount to the formula:

A = $6,500 [1 + (4% x 3)]

A = $7,280