Solution:
The investment of $ P today will have a future value @ r% after n years as show
P = $10000; n = 5 years ; r = 6%
Since it is simple interest we have:
Interest I = Principal × Rate of Interest(%) × Time (in years) / 100
Interest I = (10,000 × 6 × 5) / 100 = $ 3,000
Hence the future value of $10000 after 5 years @ 6% will be
Amount = Principal + Interest
= $10,000 + $3,000
= $13,000
Hence the required future value is$13,000.
Summary:
An investment of $10000 today invested at 6% for five years at simple interest will be $13,000.
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