Question

Juan decided to start savings for college. He deposited $500 into an account which earns 4% simple annual interest. At the end of each year, he will add $250 to this account. How much will he have in his account after the end of three years?

a
$550
b
$770
c
$1,050.80
d
$1,342.83

Answer 1

I am getting a different answer The reason being the first year we calculating the 4% of the initial amount of the $500 towards the end of the year if he deposits the 250 the second year he gets to have a 4% interest of the 750 in total If he deposits the 250 in the 3rd he gets to have a 4% of 1000 So if you actually calculate that and get the total of all the amount which is 1,000 plus the percentages of all that you get what I've shared

Answer 2

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Answer:

d $1342.83

Explanation:

At the end of the first year, the account balance will be $500 plus 4% interest on that amount, plus the $250 deposited at the end of the year:

$500(1.04) +250 = $770

At the end of the second year, the account balance will be $770 plus 4% interest on that amount, plus the $250 deposited at the end of the year:

$770(1.04) +250 = $1050.80

At the end of the third year, the account balance will be $1050.80 plus 4% interest on that amount, plus the $250 deposited at the end of the year:

$1050.80(1.04) +250 = $1342.83

_____

Additional comment

You can make an appropriate guess by realizing the total of the deposits is ...

$500 + 3×250 = $1250

Adding interest to that will increase the amount. The only answer choice greater than $1250 is $1342.83.