Question

John decides to save $10,000 per year for the next 10 years, and then $15,000 per year for the 10 years after that. He earns 8% per year on his investments. How much will he have in his savings at the end of the 20 years?.

Answer 1

Answer:

$ 45,000

Explanation:

First 10 yrs: $ 10,000

Second 10 yrs: $ 15,000

SI=Principal (P) ×Rate(R)×Time(T)/100

SI = PRT/100

FOR 1ST YEAR

SI=$10,000×8×10/100

SI=$8,000

Amount (A)= Principal (P) +Interest (I)

A= $10,000+$ 8,000

A= $18,000

FOR 2ND YEAR

SI=$15,000×8×10/100

SI=$12,000

A= $15,000+ $12,000

A=$ 27,000

TOTAL EARN FOR 20YEARS

ADDITION OF BOTH YEARS

$18,000+ $27, 000

TOTAL EARN = $45,000.