Question

Suppose you deposit $2000 in a savings account that pays interest at an annual rate of 6%. If no money is added or withdrawn from the account, answer the following questions.

A. how much will be in the account after 4 years?
B. How much will be in the account after 16 years?
C. How many years will it take for the account to contain $2500?
D. How many years will it take for the account to contain $3000?

Answer 1

Explanation:

The account starts at 2000$

2000$×0.06(same as 6%)= 120$

The account gains 120$ yearly

A. After 4yrs that would be 480$ interest

120$×4= 480$

2000$+480$= 2480$ after 4yrs

B. Aftee 16yrs that would be 1920$ interest

120$×16= 1920$

1920$+2000$= 3920$

C. 2500$-2000$= 500$

500$÷120$= 4.16yrs

It will take about 4.2 years for the account to reach 2500$

D. 3000$-2000$= 1000$

1000$÷120$= 8.33yrs

It will take about 8.3yrs for the account to reach 3000$