Question

Fifty dollars is depostied in the bank at the end of each year for 25 years. During the first eight years the bank paid 5% compunded annuallynand after the paid 6% interest compunded annually. Find the amount in the account after 15 years.

Answer 1

Answer:

The amount after 7 years will be $111.07

Explanation:

We have given principal amount = $50

It is given that rate of interest for 8 years is 5 %

Time period n = 8 years

So amount after 8 years $A=P(1+\frac{r}{100})^n=50(1+\frac{5}{100})^8= 73.87$

This amount will act as principal amount for remaining year

We have to find the amount after 15 years

So left time = 15 - 8 = 7 years

Rate of interest for this 7 years is 6 %

So amount after 15 years

$A=P(1+\frac{r}{100})^n=73.87(1+\frac{6}{100})^7= 111.07$

So the amount after 7 years will be $111.07