ALGEBRA

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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?
Ok found I think I found the interest
900x0.075=67.50 is this correct.Now I need help in finding the future value.

• ALGEBRA -

Yes, r=.075 x \$900 = interest is \$67.50
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r=.075 P=900

1 yr P+rP
or P(1+r) or 900(1+.075) = \$967.50

2 yr (P+rP) + r(P+rP)
or P(1+r)^2 or 900(1+.075)^2 = \$1040.06 in 2 years

So for future years the formula would be P(1+r)^x where x=number of years

• ALGEBRA -

Thanks Lee

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