Question

A )You plan to deposit $500 in a bank account now and $200 at the end of the year. If the account earns 2% interest per​ year, what will be the balance in the account right after you make the second​ deposit? The balance in the account right after you make the second deposit will be ​... $ . ​(Round to the nearest​dollar.)

b)You have a loan outstanding. It requires making nine annual payments of $7,000 each at the end of the next nineyears. Your bank has offered to restructure the loan so that instead of making the nine payments as originally​ agreed, you will make only one final payment in nine years. If the interest rate on the loan is 9%​,what final payment will the bank require you to make so that it is indifferent to the two forms of​ payment?

The final payment the bank will require you to make is ... $​(Round to the nearest​ dollar.)

Answer 1

The balance in the account after the second deposit will be $204.

Step-by-step explanation:

To find the balance in the account after the second deposit, we can use the formula for compound interest:

A = P(1 + r)^n

where A is the final amount, P is the principal amount, r is the interest rate, and n is the number of compounding periods.

In this case, the principal amount for the first deposit is $500, the interest rate is 2%, and the number of compounding periods is 1. So the balance after the first deposit is $500(1 + 0.02)^1 = $510.

For the second deposit, the principal amount is $200 ($510 from the first deposit + $200), the interest rate is still 2%, and the number of compounding periods is 1. So the balance after the second deposit is $200(1 + 0.02)^1 = $204.