Question

John decided to start saving for college. He deposited $500 into an account which earns 4% simple annual interest. At the end of each year, he will add $250 to this account. How much will he have in his account after the end of three years?

Answer 1

Fv=500×(1+0.04×3)+250×(1+0.04×2)+
250×(1+0.04×1)=560+270+260=1,090