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

What is the meaning of the $3000 in the problem statement?

D) It is P, the principal value of a deposit that earns interest of 3% simple interest.

How often is the interest compounded?

C) Never, the inverstment uses simple interest

r = 3%

r = 0.03

n = 3/12 = 1/4 = 0.25

F = (1+nr)P

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

F = $3022.50

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