Question

Suppose you deposit $2,000 in a savings account that pays interest at an annual rate of 6%. If no money is added or withdrawn from the account, answer the following questions.
a. How much will be in the account after 4 years?
b. How much will be in the account after 17 years?
c. How many years will it take for the account to contain $2,500?
d. How many years will it take for the account to contain $3,000?

Answer 1

Answer:

• a. $2480
• b. $4040
• c. 4 years and 2 months
• d. 8 years and 4 months

Step-by-step explanation:

a. Account after 4 years:

• 2000 + 4*2000*0.06 = $2480

b. Account after 17 years:

• 2000 + 17*2000*0.06 = $4040

c. Time when account = $2500:

• 2000 + x*2000*0.06 = 2500
• 120x = 500
• x = 500/120
• x = 4 20/120 = 4 2/12 years = 4 years and 2 months

d. Time when account = $3000

• 2000 + x*2000*0.06 = 3000
• 120x = 1000
• x = 1000/120
• x = 8 40/120 = 8 4/12 years = 8 years and 4 months