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An investment is 3300 is made for 4 months at an annual simple interest rate of 3.75% determine the following values P= $3300 R=0.0375T=4/12 Find the amount of interest earned on this loan I=??Calculate the future value of the loan

Sagot :

We are given the following information;

An investment of $3300 at the rate of 3.75% per annum simple interest for 4 months.

The formula for simple interest is;

[tex]I=P\times R\times T[/tex]

Where the variables are;

[tex]\begin{gathered} I=\text{interest} \\ \text{ P=Principal (3300)} \\ R=\text{Rate (3.75\%, OR }0.0375) \\ T=\text{Time in years (OR }\frac{4}{12}yrs) \end{gathered}[/tex]

We substitute the given values and we have;

[tex]\begin{gathered} I=3300\times0.0375\times\frac{4}{12} \\ I=\frac{3300\times0.0375\times4}{12} \end{gathered}[/tex]

We now simplify and the answer becomes;

[tex]I=41.25[/tex]

The amount of interest earned on this loan is $41.25.

The future value would be the total amount after 4 months and that would be;

[tex]\begin{gathered} FV=\text{ Principal}+Interest \\ FV=3300+41.25 \\ FV=3,341.25 \end{gathered}[/tex]

ANSWER:

Interest = $41.25

Future Valu = $3,341.25

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