Question

Mark put $3290 into a bank that offered 3% interest rate compounded monthly. Mark kept the money in this account for 9 years and then moved all this money to a new account that offered 6% interest rate compounded weekly.

Do not round any numbers until you get to an answer.

How much money was in the first account after 9 years?

$

How much money will be in Mark's new account after 8 more years in the new account?

In other words how much money will Mark have after 17 years?

Answer 1

first stage:
i = .03/12 = .0025
n = 9(12) = 108

second stage:
i = .06/52 = .001153846
n = 8(52) = 416

after first stage:
amount = 3290(1.0025)^108 = $4308.33

after 2nd stage:
amount = 3290(1.0025)^108(1.001153846)^416
= $6960.66