Answer
Interest = $5,250
Future value = $14,000
Explanation
Given:
Principal, P = $8,750
Rate, R = 3%
Time, T = 20 years
What to find:
The interest and future value.
Step-by-step solution:
The Interest
The interest can be calculated using the simple interest formula below.
[tex]Interest=\frac{P\times R\times T}{100}=\frac{\$8,750\times3\times20}{100}=\$5,250[/tex]The interest of $8,750 at 3% for twenty years is $5,250
The future value
Future value = Amount = Principal + Interest
Future value = $8,750 + $5,250
Future value = $14,000
