Question

Rick deposits $1,000 into an investment account which earns 4% annually. Sally loans $1,000 to a friend, and the friend agrees to pay her $50 each year, and will return the $1,000 after 10 years.
Determine the amount of money each person has after 10 years.
A. Rick: $1,040; Sally: $1,500 B. Rick: $1,453.16; Sally: $1,500 C. Rick: $1,534.32; Sally: $2,000 D. Rick: $1,480.24; Sally: $1,500 I know Sally earns $1,500... but what about Rick? Please help?

Answer 1

the amount of money rick earned can be solve using the formula:

F = P (1+ i)^n

Where F is the future money

P is the initial money

i is the interest rate

n is the time

F = 1000 ( 1 + 0.04)^10

F = $ 1,480.24

Sally

F = 1000 + (50)(10)

F = $ 1500

So the answer is D

Answer 2

Answer: 1. B) decay; 4

2. C) growth; 12

3. C) growth; 129

4. D) rick: 1,480.25 sally: 1,500

5. D) y= 120,000 (1.012)^x ; 143,512

6. C) y= 1,860,000 (0.985)^x ; 1,551,485

7. B) 2,249.73

8. C) 4,051.63

9. D) 6 years

10. C) 11 years

Step-by-step explanation: 100% for practice :)