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telo118 [61]
3 years ago
13

Cameron opens a checking account and a savings account at his local bank. He deposits $10,000 into his checking account and $2,0

00 into his savings account. He will withdraw $1,200 from his checking account each year. His savings account earns 8% interest each year. In how many years will both accounts have the same balance? 5.5 years

Mathematics
1 answer:
Xelga [282]3 years ago
7 0
The wording "earns 8% interest each year" does not make it clear whether the savings account interest is compounded. (It usually is in real life, but not always in math problems.) The graphical solution shows both simple interest and interest compounded annually.

Simple interest: the balances will both be $2941.18 after 5.88 years.

Compound interest: the balances will both be $3111.06 after 5.74 years.

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