Question

Josh earns $2700 each summer and puts the money in a savings account with a 4.5% simple interest rate. If he deposits the same amount each year,how much money will he have at the end of his third summer?

A. $4700
B.$8464.50
C.$9125.70
D.$12,850

Answer 1

Answer: Option 'B' is correct.

Explanation:

Since we have given that

Amount Josh earn each summer = $2700

Rate of simple interest = 4.5%

According to question, he deposits the same amount each year.

First summer, he deposited = $2700

In Second summer, he deposited = $2700×2= $5400

In Third summer, he deposited = $2700 × 3=$8100

At the end of his third summer, his money becomes,

`\text{Simple Interest}=(P* R* T)/(100)\\\\\text{Simple Interest}=(8100* 4.5* 1)/(100)\\\\\text{Simple Interest}=\$364.5`

As we know the formula for "Amount" that it becomes at the end of his third summer:

`Amount=P+S.I\\\\Amount=\$8100+\$364.5\\\\Amount=\$8464.5`

Hence, Option 'B' is correct.