What is the future value of $10,000 on deposit for 5 years at 6% simple interest?

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.

What is the future value of $10,000 on deposit for 5 years at 6% simple interest?

Summary:

An investment of $10000 today invested at 6% for five years at simple interest will be $13,000.