Question

Problem #1: Find the total amount if you deposit $500 at a rate of 5% for two years using simple interest.
Year 1
Year 2

Problem #2: Find the total amount if you deposit $300 at a rate of 6% for three years using simple interest.
Year 1
Year 2
Year 3

Problem #3: Find the total amount if you deposit $ 600 at a rate of 5% for two years compounded annually.
Year 1
Year 2

Problem #4: Find the total amount if you deposit $800 at a rate of 8% for a total of four years compounded annually.
Year 1
Year 2
Year 3
Year 4

Answer 1

1. P = Po + Po*r*t
P = 500 + 500*0.05*2 = $550.

2. Same procedure as #1.

3. P = Po(1+r)^n

r = 5%/100% = 0.05 = Annual % rate expressed as a decimal.

n = 1comp/yr * 2yrs = 2 compounding periods.

Plug the above values into the given Eq
and get $661.50.

4. Same procedure as #3.