Question

Felicia has $350 to deposit into two different savings accounts. Felicia will deposit $200 into Account I, which earns 4.5% annual simple interest. She will deposit $150 into Account II, which earns 334% interest compounded annually. Felicia will not make any additional deposits or withdrawals. Which amount is closes to the total balance of these two accounts at the end of 6 years?

Answer 1

Total price after 6 years in Account I is :

$P _1=P_o+\dfrac{P_ort}{100}\\\\P_1=200+\dfrac{200\times 4.5 \times 6}{100}\\\\P_1=\ 254$

Total price after 6 years in Account II is :

$P_2=P_o(1+\dfrac{r}{n})^{nt}\\\\P_2=150(1+\dfrac{3.34}{1})^{1\times 6}\\\\P_2=\ 1002373.64$

Total balance, $T=P_1+P_2=1002373.64+254=\ 1002627.64$

Hence, this is the required solution.