A bank made a farmer a loan of $1,400 at 16% for three years compounded annually. Find the future value and the compound interest paid on theloan. Compare the compound interest with simple interest for the same period.Future value=S(Round to the nearest cent as needed.)

Answered: A bank made a farmer a loan of $1,400…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A bank made a farmer a loan of $1,400 at 16% for three years compounded annually. Find the future value and the compound interest paid on the
loan. Compare the compound interest with simple interest for the same period.
Future value=S
(Round to the nearest cent as needed.)

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Future value refers to the total amount that will accrue over defined time frame when that principal amount is invested. The present value refers to the principal amount that is invested for realizing the future value.

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