Answer:
- <u><em>d. $40,510.15 </em></u>
Explanation:
The following tables will make it easier understanding the calculations.
Every year, you add the deposit of $8,800 to the starting amount, calculate the 5.7% interest over the balance, add the interests to the balance and obtain the final balance of the year, which is the starting balance of the next year.
<u>First year</u>:
Start ($): 0
Deposit ($): 8,800
Balance ($): 8,800
Interest($): 5.7% × 8,800 = 501.60
Final balance ($): 8,800 + 501.60 = 9,301.60
<u>Second year</u>:
Start ($): 9,301.60
Deposit ($): 8,800
Balance ($): 9,301.60 + 8,800 = 18,101.60
Interest($): 5.7% × 18,101.60 = 1,031.79
Final balance ($): 18,101.60 + 1,031.79 = 19,133.39
<u>Third year</u>:
Start ($): 19,133.39
Deposit ($): 8,800
Balance ($): 19,133.39 + 8,800 = 27,933.39
Interest($): 5.7% × 27,333.39 = 1,595.20
Final balance ($): 27,933.39 + 1,595.20 = 29,525.59
<u>Fourth year</u>:
Start ($): 29,525.59
Deposit ($): 8,800
Balance ($): 29,525.59 + 8,800 = 38,325.59
Interest($): 5.7% × 38,325.59 = 2,184.56
Final balance ($): 38,325.59 + 2,184.56 = 40,510.15
