If the principal P = $900, the rate r = 7 1/2 %, and time t = 1 year, find the following. What is the amount of interest?
What is the future value?
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To find the amount of interest, we can use the formula: Interest = Principal x Rate x Time.
1. Calculate the interest:
Principal (P) = $900
Rate (r) = 7 1/2 % = 7.5% = 0.075 (in decimal form)
Time (t) = 1 year
Interest = $900 x 0.075 x 1 = $67.50
Therefore, the amount of interest is $67.50.
To find the future value, we can use the formula: Future Value = Principal + Interest.
2. Calculate the future value:
Principal (P) = $900
Interest = $67.50
Future Value = $900 + $67.50 = $967.50
Therefore, the future value is $967.50.