Homework Answers
Principal in Period 0 = $7,500
Interest rate = 25% or 0.25
Time period = 1
Calculate the amount in Period 1 -
Amount = Principal in Period 0 [1 + interest rate]Time period
Amount = $7,500 [1 + 0.25]1
Amount = $7,500 * 1.25
Amount = $9,375
Thus,
The money in Period 1 would be $9,375.
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