Question

A bank account starts with $100 and earns 4% interest annually. How much money will be in the account after 12 years assuming no transactions have occurred. Round to the nearest cent.

Jim received a $2000 loan from his bank. The loan accrues 3% interest every 3 months. How much will Jim owe the bank after 4 years? Round to the nearest cent?

Answer 1

Jim will owe the bank $3209.4 after 4 years

Explanation:

Answer 2

a] The future amount of an invested is given by:
A=P(1+r/100)^t
where:
A=amount
P=principle
r=rate
t=time
thus the amount after 12 years will be:
A=100(1+4/100)^12
A=$160.10

b] The amount that Jim will owe the bank after 4 years will be given by;
A=p(1+r/200n)^nt
A=amount
p=principle=2000
r=rate=4×3=12% p.a
t=time=4 years
n=number of terms=4
thus:
A=2000(1+0.03)^16
A=$3209.41
Jim will owe the bank $3209.4 after 4 years