$350 at 6 3 4 % simple interest for 2 years

Question

Find the future value, using the future value formula and a calculator. (Round your answer to the nearest cent.)

Answer 1

Good Morning, Katie,

The formula used to calculate simple interest is as follows: 

A = P (1 + rt)   Where A equals the total accrued amount, P equals the principal amount, I equals the interest, r equals the amount of interest accumulated within one year in decimal; r = R/100, R equals the the rate of interest per year as a percent; r *100, and t equals the time period involved in months or years.

Therefore, given the information you provide in the problem, the following values may be plugged into the appropriate parts of the formula for you to solve. First though: You want to convert R (percent) to r (a decimal). 

r = R/100 = 6.34%/100 = 0.0634 per year.

Now, we can solve our original equation I provided you above A = P (1 + rt)

A = 350(1 + (0.0634 × 2)) = 394.38   Remember you want to work this equation with PEMDAS, right? Therefore, we work the equation from inside the parenthesis first and outward. 


Therefore, in your particular problem, A the accrued amount, that is the total amount accrued, principal plus interest, from simple interest on a principal of $350.00 at a rate of 6.34% per year for 2 years is $394.38.

I hope I have helped you and want to encourage you to ask any questions you still have, in the comment section below. Have a great day today.