Question

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?

Answer 1

you will want to use the annual compounding equation:
\[FV = PV ( 1+i) ^{n}\]
where
FV = final value [answer]
PV = present value [$7000]
i = interest rate [5% or 0.05]
n = number of years [ 3 years]
can you plug in the numbers into the equation and solve?