MAT-144 · Mathematical Reasoning Topic 03 · Savings
Topic 03 · Review · Q1

Finding the interest and future value of a simple interest loan or investment

Two-part: compute the simple interest, then add it to the principal to find what the account is worth later.

01 Worked Example Video

Every step of Finding the interest and future value of a simple interest loan or investment explained on video. Pause anywhere; the embed scrolls independently of the page.

YOUTUBE
02 What This Looks Like on ALEKS

ALEKS randomizes the numbers each attempt, but the question shape stays the same. Here are three example versions you might see.

Carlos

Carlos deposits $3,000 into an account that pays simple interest at an annual rate of 5%. He does not make any more deposits. He makes no withdrawals until the end of 5 years when he withdraws all the money.

What’s the total amount in the account after 5 years? Type just the number.

A = $
Maria

Maria deposits $5,000 into an account that pays simple interest at an annual rate of 4%. She does not make any more deposits. She makes no withdrawals until the end of 7 years when she withdraws all the money.

What’s the total amount in the account after 7 years? Type just the number.

A = $
Eric

Eric deposits $1,500 into an account that pays simple interest at an annual rate of 6.5%. He does not make any more deposits. He makes no withdrawals until the end of 4 years when he withdraws all the money.

What’s the total amount in the account after 4 years? Type just the number.

A = $
Heads up: Your ALEKS version will use different numbers. The numbers in the practice below are different too — that way you're exercising the move, not memorizing one answer.
03 The Rule
I = P × r × t principal, rate (as a decimal), time (in years)
A = P + I future value = principal + interest
Simple interest: multiply the three inputs to get I, then add it back to the principal to get A. Rate must be a decimal (0.05, not 5); time must be in years.
Common slips
(1) Used r = 5 instead of 0.05. If Part (a) is $75,000 on a $3,000 account, you skipped the percent-to-decimal step. (2) Stopped at I. If you wrote just the interest for Part (b), you forgot to add the principal back. A = P + I, always.
04 Practice — Step by Step
Practice this problem step by step
Deposit $2,000 at 6% simple annual interest for 4 years. Find the future value.
Step 1

Convert the rate

Write 6% as a decimal.
r =
Step 2

Compute the interest

Plug into I = P × r × t. Type just the number.
I = $
Step 3

Compute the future value

Add the interest to the principal to get the future value A.
A = $
Topic overview Q2
MAT-144 · TOPIC 03 · REVIEW · Q1 OF 06