Question

A youth group has a yard sale to raise money for a charity. The group earns $800 but decides to put its money in the

Answer 1

Answer:

see explanation below

Step-by-step explanation:

In this case, I don't know if the 4% rate is annual, so I'm going to assume that it's annual.

The other thing that I will assume is that this increase is constant but every year you get 4% interest of the amount that you have by the end of the year, and not 4% of the initial amount. However, I will do it by the two methods just in case.

If the amount is increased 4% every year then:

P = Po * (IV)^n

where n: year

To get the index variation (IV):

IV = 4/100 = 0.04, and we also know that every year is increased so:

1 + 0.04 = 1.04

Now let's get the money after 3 years:

P = 800 * (1.04)^3 = 899.89 $ or simply 900$

If the amount is increased 4% but over the initial amount always:

let's calculate the 4% of 800:

800 * 0.04 = 32

The first year it would be:

800 + 32 = 832 $

second year:

832 + 32 = 864$

third year: 864 + 32 = 896$

So, for the first assumption we get 900$ and the second assumption we get 896$.