Formula: A = P(1 + nr)
A = final amount
P = principal, or original amount
n = number of years
r = rate of interest per year
Example:
$2,000 is deposited in an account paying 12% per year. Find the balance after 7 years using simple interest.
Solution:
P = $2,000, r = 0.12, and n = 7
A = $2,000(1 + 7·0.12) = $3,680
