Question

If a man invests $1000 in a savings account and another $1000 in a fixed deposit. If the savings account pays 4.5% interest per annum and the fixed deposit pays 6% interest per annum, find the total amount after 1 year of investment. Please I need a quick answer to this!

Answer 1

Results are below.

Explanation:

Giving the following information:

Savings account:

PV= $1,000

n= 1

i= 0.045

Fixed Deposit:

PV= $1,000

n= 1

i= 0.06

To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

Savings account:

FV= 1,000*1.045^1

FV= $1,045

Fixed deposit:

FV= 1,000*1.06^1

FV= $1,060