Question

You want to buy a new ski boat 2 years from now, and you plan to save $6,400 per year, beginning one year from today. You will deposit your savings in an account that pays 6.2% interest. How much will you have just after you make the 2nd deposit, 2 years from now?

Answer 1

Total Amount after 2 years = $13196.8

Step-by-step explanation:

Data Given:

Amount of savings per year = $6400

Interest rate = 6.2%

Find Total Amount in account after 2 year:

Solution:

Lets consider it step by step.

Amount of money deposited in account after 1 year = $6400

After 2 years, we earn 6.2% interest on $6400,which is:

`(6.2)/(100)\cdot6400= 396.8`

So, after 2 years, BEFORE the 2nd deposit, we have $6400 + $396.8 = $6796.8 in the account.

AFTER 2nd deposit of $6400, total amount we have in account is:

Total Amount = $6796.8 + $6400 = $13196.8