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What is the sum of the balances of Account I and Account II at the end of 3 years?

What is the sum of the balances of Account I and Account II at the end of 3 years-example-1
User Yoshioka
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Use the formulas for simple and compound interest, given by:

S.I = p·r·t

C.I = p(1 + r/100)^n - p

where:

S.I: simple intererst

C.I: compound inerest

p: initial investment = 2,500

r: anual rate = 4%

t: time = 3 year

replace the previousvalues into both formulas:

S.I = (2,500)(0.04)(3) = 300

C.I = (2500)(1 + 4/100)^3 - 2500 = 312.16

Hence, after the three years the balance for both saving account are:

2,500 + 300 = 2,800

2,500 + 312.16 = 2,812.16

their sum is:

2,800 + 2,812 = 5,612.16

Hence, the final balance account is $5,612.16

User ALL
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