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6 October, 13:28

Find the future value (in dollars) of an 18-month investment of $3,500 into a simple interest rate account that has an annual simple interest rate of 5.5%.

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  1. 6 October, 13:31
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    Answer: the future value is $3788.75

    Step-by-step explanation:

    The formula for determining simple interest is expressed as

    I = PRT/100

    Where

    I represents interest paid on the amount invested.

    P represents the principal or amount invested.

    R represents interest rate

    T represents the duration of the investment in years.

    From the information given,

    P = 3500

    R = 5.5

    T = 18 months = 18/12 = 1.5 years

    I = (3500 * 5.5 * 1.5) / 100 = 28875/100

    I = 288.75

    the future value would be

    3500 + 288.75 = $3788.75
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