Larry invests $100 in a savings plan. The plan pays 4 1/2 % interest each year on his $100 account balance. a. How much money

Question

Larry invests $100 in a savings plan. The plan pays 4 1/2 % interest each year on his $100 account balance.

a. How much money will Larry earn in interest after 3 years? After 5 years?

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Eden 2 weeks 2022-01-08T12:01:59+00:00 2 Answers 0 views 0

Answers ( )

    0
    2022-01-08T12:03:07+00:00

    Answer:

    $14.12 (after 3 years) and $24.62 (after 5 years)

    Step-by-step explanation:

    Use the compound amount formula (assuming annual compounding):

    A = P(1 + r)^t

    Here  A = $100(1 + 0.045)^3 (after 3 years)

                 = $100(1.045)^3 = $114.12.  

              The interest earned (alone) would be $14.12.

    After 5 years:

    Here  A = $100(1 + 0.045)^5 (after 5 years)

                 = $100(1.045)^5 = $124.62

              The interest earned (alone) would be $24.62.

    0
    2022-01-08T12:03:33+00:00

    Answer: $14.12

    Step-by-step explanation:

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