Explanation:
To calculate the amount of money in the account at the end of 4 years, we can use the formula for simple interest:
I = P * r * t
Where:
I = Interest earned
P = Principal amount (initial deposit)
r = Annual interest rate (as a decimal)
t = Time period (in years)
Plugging in the given values, we get:
I = $50,000 * 0.025 * 4
I = $5,000
This means that over the course of 4 years, the account will earn $5,000 in interest.
To find the total amount in the account at the end of 4 years, we simply add the interest earned to the initial deposit:
Total amount = $50,000 + $5,000
Total amount = $55,000
Therefore, at the end of 4 years, there will be $55,000 in the account if you deposit $50,000 into a bank account that earns 2.5% simple interest annually.