Question
In: Economics
John starts a savings account by depositing $1,000 today and thenincreases the deposit by $50...
John starts a savings account by depositing $1,000 today and then increases the deposit by $50 each year until Year 20. If the bank pays an interest of 12% per year compounded yearly, what is the account balance at the end of 25 years?
Solutions
Expert Solution
we had the initial deposit of
$1000 and we increased the deposit by $50 each year for 20
years
so for the first 20 years we had calculated the based on simple interest ( P*R*T / 100)for each year and then the amount after 20 years is $13284.94
Balance after 5 years is calculated on the basis of compound interest P*(1+r/100)^n so the total amount is $23381.49 (approx)
Rahul Sunny answered 2 years agoRelated Solutions
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