Question

The principal P is borrowed at a simple interest rate r for a period of time t. Find the loan's future value A, or the total

amount due at time t.
P = $1000, r = 6%, t = 5 years

Answer 1

$1300

Explanation:

To find the total account balance, use the simple interest account balance formula.

P(1+rt)

1000(1 + .06 · 5)

1000(1 + .3)

1000(1.3)

$1300