Question

if you put $4000 in savings account that pays interest rate of 4%, compounded annually, how much will you have in 5 years? How much interest will you earn during the 5 years? If you put $4000 each year into a savings account that pays interest at the rate of 4% a year, how much would you have after 5 years?

Answer 1

1. If you put $4000 in savings account that pays interest rate of 4%, compounded annually, how much will you have in 5 years? How much interest will you earn during the 5 years?

http://easycalculation.com/compound-interest.php

2. If you put $4000 each year into a savings account that pays interest at the rate of 4% a year, how much would you have after 5 years?

How will you alter what you did for #1 in order to answer #2?

Answer 2

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

Po = $4,000.

r = (4%/100%) = 0.04

n = 1Comp./yr * 5yrs = 5 Compounding
periods.
Plug the above values into the given Eq and get: P = $4,866.61.


2. P = Po(1+(y-1))*(1+r)^n

Y = Length of loan = 5 years.
P = 4000(1+4)*(1.04)^5 = $24,333.06

Answer 3

R