Question

Bradley Snapp has deposited $5,000 in a guaranteed investment account with a promised rate of 6% compounded annually. He plans to leave it there for 4 full years when he will make a down payment on a car after graduation. How much of a down payment will he be able to make?

Answer 1

$6,312.38

Step-by-step explanation:

Bradley snapp deposited $5,000 in an investment account

He was given a rate of 6% compounded annually

He plans to leave the money there for 4 years when he will make a down payment on a car

Therefore the down payment which he will be able to make can be calculated as follows

= $5000×(1+0.06)^4

= $5000×1.06^4

= $5000 × 1.26247696

= $6,312.38

Hence the down payment Bradley will be able to make is $6,312.38