The loan's future value A, or the total amount owed at time t, is $1728.
Simple Interest means ?
Calculating the amount of interest that will be charged on a loan can be done quickly and easily using the simple interest formula. To compute simple interest, multiply the principle, the number of days between payments, and the daily interest rate.
Due to that,
$800 is the principal.
Interest rate is 7.25%.
Duration: 5 months
Equation:
A= P(1 + rt)
Calculation:
R=7.25% percent to r a decimal conversion first
r=0.0725 annually.
How to resolve our equation
A= P(1 + rt)
A= 800(1 + (7.25)(0.416))
To resolve,
A= $1728
The total amount due at time t, or the loan's future value A, is therefore $1728.
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