The amount he saved for college when his son attains the age of 18 years is $900 by making a deposit in a bank of $1,000 with an interest of 5%.
What are bank deposits?
Bank deposits are the amounts deposited by the account holders in their respective bank accounts. These accounts are called saving accounts.
Given values:
Bank Deposit : $1,000
Interest rate: 5%
Computation of amount saved by using simple interest method:
[tex]\rm\ Amount \rm\ saved=\rm\ Bank \rm\ Deposits\times\ \rm\ Time ( \ in \rm\ years) \times\ \rm\ Interest \rm\ rate \\\rm\ Amount \rm\ saved=\$1,000 \times\ 18 \times\ 5\% \\\rm\ Amount \rm\ saved=\$900[/tex]
Therefore, when he deposits $1,000 in the bank for 18 years with an interest of 5%, then he saved the amount of $900.
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