Question

You pay $3000 now, and $4000 in two years to a saving account at 4.8% compounded monthly for the first three years and 2.6% compounded biweekly for the next three years. How much will you have in that account six years from now?

Answer 1

After depositing $3000 initially and an additional $4000 in two years, with a 4.8% interest rate compounded monthly for the first three years and a subsequent 2.6% interest rate compounded biweekly for the next three years, the total amount in the savings account six years from now will be approximately $7,945.72.

Step-by-step explanation:

In the first three years, the interest is compounded monthly at a rate of 4.8%. The formula for compound interest is given by
`\(A = P(1 + (r)/(n))^(nt)\)`, where (A) is the amount, (P) is the principal, (r) is the interest rate, (n) is the number of times interest is compounded per year, and (t) is the time in years. For the initial $3000, the total after three years is
`\(3000(1 + (0.048)/(12))^(12 * 3) \approx 3600.93\)`. Then, an additional $4000 is deposited, resulting in a new principal of $7600.93.

For the next three years, with a 2.6% interest rate compounded biweekly, the formula becomes
`\(A = P(1 + (r)/(n))^(nt)\)`, where (n = 26) (biweekly compounding). The final amount after the next three years is
`\(7600.93(1 + (0.026)/(26))^(26 * 3) \approx 7945.72\)`. Therefore, after six years, the total amount in the savings account will be approximately $7,945.72.

Full Question:

How much will you have in that account six years from now?