Hello i need help with the second part of the question The future value of $1,000 four years from now is $ 1215.51. (Enter your response rounded to two decimal places.)The amount of the future value that is total interest is $(Enter your response rounded to two decimal places.)

Answered: Suppose that the interest rate is ɔ…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hello i need help with the second part of the question

The future value of $1,000 four years from now is $ 1215.51. (Enter your response rounded to two decimal places.)
The amount of the future value that is total interest is $
(Enter your response rounded to two decimal places.)

Expert Solution

Step 1: Defining future value

The future value of total interest represents the amount of interest that will accumulate on a principal amount over a particular time at a given interest rate. To compute the future value of total interest, use the formula for compound interest:

FV = P(1+r/n) ^(nt) −P

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