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.)
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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Transcribed Image Text: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.)
Expert Solution
Step 1
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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