The principal P is borrowed at simple interest rate r for a period of time t. Find the loans future value,A, or the total amount due at a time t.
P=$16,000 r= 8.5% t= 5years
To find the future value of the loan, we can use the formula for simple interest:
A = P(1 + rt)
Given that P = $16,000, r = 8.5% (or 0.085 as a decimal), and t = 5 years, we can substitute these values into the formula:
A = 16,000(1 + 0.085 * 5)
Calculating:
A = 16,000(1 + 0.425)
A = 16,000 * 1.425
A ≈ $22,800
Therefore, the total amount due at the end of the 5-year period will be approximately $22,800.