Question

please help
Sam deposits $12,500 each year into a retirement account with a 3% simple interest
rate. If he deposits the same amount each year, how much money will he have at the
end of his fourth year?
$13,625
$26,725
$52,250
$54,500

Answer 1

Answer:

$53750

Step-by-step explanation:

Sam deposit $12500 every year which grows at a simple interest of 3% and we have to calculate the total sum after 4 years.

If Sam deposit $x with r% simple interest then the principal will grow after 4 years to $x[1 + \frac{4r}{100}]$

Again, for the second year $x investment with r% simple interest will grow to  $x[1 + \frac{3r}{100}]$.

Now, the third year $x investment with r% simple interest will grow to  $x[1 + \frac{2r}{100}]$

And finally the fourth year $x investment with r% simple interest will grow to  $x[1 + \frac{r}{100}]$

Therefore, the total sum becomes

$x[1 + \frac{4r}{100}] + x[1 + \frac{3r}{100}] + x[1 + \frac{2r}{100}] + x[1 + \frac{r}{100}]$

= $4x + \frac{10 \times r \times x}{100}$

= $4x + \frac{rx}{10}$

So, in case of Sam the sum will be = $4 \times 12500 + \frac{3 \times 12500}{10}$ = $53750

Answer 2

Answer:

52,500

Step-by-step explanation:

I took the test and thats what it was