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?

Question

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.

Answer 1

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

Answer 2

Thanks Lee