Question

Ben has 100.00 in his savings account. He wants to save more money. He is looking at two investment plans. Under Plan A, he will increase his account balance by 20.00 per year. Under Plan B, he will increase his account balance by 15% per year. How much more will he save under Plan B in 10 years?

Answer 1

The correct answer is 104.55

Explanation:

From the given information we can write,

Principle amount = 100

To find the amount after 10 years in plan A

Now total = 100

Under plan A increase his account balance by 20.00 per year

Amount increased = 10 *20 = 200

Total = 100 + 200 = 300

To find the amount after 10 years in plan B

Total = 100

Amount after 10 yeras = 100[1 + 15/100]¹⁰

= 100 * 1.15¹⁰ = 100 * 4.04 = 404.55

To find the difference

Difference = 404.55 - 300

= 104.55

The correct answer is 104.55