Question

Josh earns $2700 each summer and puts the money in a savings account with a 4.5% simple interest rate. If he deposits the same amount each year,how much money will he have at the end of his third summer?
A. $4700
B.$8464.50
C.$9125.70
D.$12,850

Answer 1

Answer: Option 'B' is correct.

Step-by-step explanation:

Since  we have given that

Amount Josh earn each summer = $2700

Rate of simple interest = 4.5%

According to question, he deposits the same amount each year.

First summer, he deposited = $2700

In Second summer, he deposited = $2700×2= $5400

In Third summer, he deposited = $2700 × 3=$8100

At the end of his third summer, his money becomes,

$\text{Simple Interest}=\frac{P\times R\times T}{100}\\\\\text{Simple Interest}=\frac{8100\times 4.5\times 1}{100}\\\\\text{Simple Interest}=\ 364.5$

As we know the formula for "Amount" that it becomes at the end of his third summer:

$Amount=P+S.I\\\\Amount=\ 8100+\ 364.5\\\\Amount=\ 8464.5$

Hence, Option 'B' is correct.