What is the total amount that First Consumer Bank will receive after lending Jane $7,000 for three years at an interest rate of 5 percent, compounded annually?
There are numerous information's already given in the question. Based on these information's the answer can be easily deduced. Principal (P)= $7000 Rate of interest (i) = 5% = 0.05 Number of years (t) = 3 years Let us consider the final amount = a Then a = P (1 + i)^t = 7000 (1 + 0.05)^3 = 7000 (1.05)^3 = 7000 * 1.16 = 8129 dollars The total amount that the First Consumer Bank will receive from Jane is $8129. I hope the answer helps you.
