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October 26, 2014

October 26, 2014

Posted by **Barry** on Sunday, July 31, 2011 at 11:49pm.

- math- algebra -
**MathMate**, Monday, August 1, 2011 at 5:22amInterest for the first year is the principal, P=$900 multiplied by the rate of interest, r=0.045, multiplied by the number of periods, n=1.

So interest

I=$900*0.045*1=$40.5

The future value is the sum of the interest and the principal.

Note that in this case (n=1), the interest is the same whether it is simple or compound. In general, the question should specify whether it is simple interest or compound interest. In the latter case, the compounding period should also be specified (yearly, quarterly, monthly, etc.)

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