A bank made a farmer a loan of $1,400 at 15% for three years compounded annually. Find the future value and the compound interes
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The formula to find the amount is
Here A = amount
P is the principal
r is the rate
n is the number of years
Then to find the interest we subtract principal from amount.
Interest = A - P
Here
P= 2200, r = 3% = 0.03 , n = 6 years
Hence the interest earned = 2626.92-2200 = $426.92
Now if the total of $2200 was deposited in three banks then each account earns
Each account earns $142.31