Basic College Mathematics (10th Edition)

Published by Pearson
ISBN 10:
ISBN 13:

Chapter 6 - Percent - Test - Page 471: 25

Answer

The total amount after 4 years is 10,667.91 dollars. The interest earned is 1667.91 dollars.

Work Step by Step

Using the compound interest table, the compound amount on 6% for 2 years is 1.1236. After 2 years the savings balance is $4000\times1.1236=4494.40$ The 2nd depsosit brings the balance to $5000+4494.40=9494.40$. After 2 additional years the balance is $9494.40\times1.1236=10,667.91$ The interest earned is the ending balance minus the principal deposits. $10,667.91-4000-5000=1667.91$
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