The sum would amount to $10,527.75 after the end of 4 years.
Step-by-step explanation:
The Problem pertains to compounding interest with varying rates over the years. Our approach to solve the problem would be in a chronological fashion starting with the 1st year
Principal- $ 9000
Rate interest= 4%
Time period would be 1 year since the interest are considered for successive years.
We know the formulae- Amount= Principal (1+rate/100)
ⁿ
Where “n”= time period= 1 in all cases
⇒Amount after 1st year at 4% rate= 9000(1+4/100)
9000*104/100= $ 9360
This amount would serve as Principal for 2nd year
⇒Hence, Amount for 2nd year at 5% rate= 9360(1+5/100)
9000*105/100= $ 9828
⇒Similarly, Amount for 3rd year at 4% rate= 9828(1+4/100)
=9828*104/100= $ 10,221.12
⇒Amount for the last year at 3% rate= 10,221.12(1+3/100)
=10,221.12*103/100= $ 10527.75
Hence the present value of the amount is $ 10527.75 after the end of 4 years.
