Calculate the future amount of $3000 after 3 months if invested at 3% simple int

Question

Calculate the future amount of $3000 after 3 months if invested at 3% simple interest. What is the meaning of the $3000 in the problem statement? 0 A. It is the amount of money to be invested each month for 3 months O B. It is F, the future value of a deposit that will earn interest for 3 months. ° C. It is the total amount of interest earned after 3 months at an interest rate of 3%. 0 D. It is P, the principal value of a deposit that earns interest of 3% simple interest. How often is the interest compounded? A. twice a year ( B. once every 3 months ° C. never, the investment uses simple interest ( D. once a month

Explanation / Answer

a) option D is correct. It is the principal that is invested today

b) Option C is correct because it used simple interest

c) r = 3%

r = 0.03

d) n = 3/12 = 1/4

e) F = (1+0.25*0.03)3000

F = $3022.50

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