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Simple Interest and Future Value  Form

Simple Interest and Future Value Form

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in this video we're going to talk about how to use the simple interest formula to solve War problems so let's start with this problem John invests 5,000 in a savings account at an annual interest rate of 7% for 5 years how much money did he earn in interest so what's the total interest that he receive in the course of these five years so the equation that we're going to use is the simple interest formula I is equal to p r t where I is the total interest received which is what we're looking for p is the principal that's how much money he invests in the account which was 5,000 R is the annual interest rate which is 7% but in the form of a decimal the decimal form of 7% is 7 / 100 which turns out to be 07 and T is the time and years so T is 5 years so all we got to do is take 5,000 ultip 07 * 5 so he receives a total of 1,750 in simple interest now Part B what is the total value of his savings account at this point so keep in mind he initial

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