Question

You will make 4 deposits of $5,000 per year beginning in year 3. How much will you have in the bank at year 10 at an interest rate of 6%?

Simple interest

Answer 1

$26,600

First deposit in the year 3 will collect interest of 6% * 5000 = $300 for 7 years means it will collect interest of 7 * 300 = 2100, So first deposit totals to 5000+ 2100 = 7100

The second deposit will collect the same interest for 6 years meaning it will collect 1,800 as interest totaling 6800

The third deposit will collect interest for 5 years totaling $1,500 making the total of $6500

the last deposit will collect interest for 4 years and interest on it will be $1,200 totaling $5000 + $1200 = $6200

Total = 7100 + 6800 + 6500 + 6200 = 26,600

If this is not clear the following table may help

Year	Deposit 1	Deposit 2	Deposit 3	Deposit 4
1	-	-	-	-
2	-	-	-	-
3	5000	-	-	-
4	300	5000	-	-
5	300	300	5000	-
6	300	300	300	5000
7	300	300	300	300
8	300	300	300	300
9	300	300	300	300
10	300	300	300	300
Sum	7,100	6,800	6,500	6,200	26,600