The future value of $8000 at an interest rate of 8.5% per annum in 15 years is P = $27197.94.
What is interest?
An interest can be defined as a percentage rate that is added to a capital for a stipulated period of time, it can be variable or constant depending on the type:
- Simple interest : it is always based on the same capital.
- Compound interest : it is based on the current capital, i.e. it is variable and increases.
As we will work with compound interest, the equation we will use is given by the following expression:
P = S(1 + i)ⁿ
- P : Future value
- S : Investment
- i : interest
- n : period
P = $8000(1 + 0.085)¹⁵
P = $27197.94
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