Question

Fifty dollars is depostied in the bank at the end of each year for 25 years. During the first eight years the bank paid 5% compunded annuallynand after the paid 6% interest compunded annually. Find the amount in the account after 15 years.

Answer 1

The amount after 7 years will be $111.07

Step-by-step explanation:

We have given principal amount = $50

It is given that rate of interest for 8 years is 5 %

Time period n = 8 years

So amount after 8 years
`A=P(1+(r)/(100))^n=50(1+(5)/(100))^8=$73.87`

This amount will act as principal amount for remaining year

We have to find the amount after 15 years

So left time = 15 - 8 = 7 years

Rate of interest for this 7 years is 6 %

So amount after 15 years

`A=P(1+(r)/(100))^n=73.87(1+(6)/(100))^7=$111.07`

So the amount after 7 years will be $111.07