Question

Mr Wilinks deposited $1,500 in a new account at his bank. The bank pays 2.5% interest compounded annually on his account. Mr Wilinks makes no additional deposits or withdrawals. What is the balance of the account at the end of 4 years?

Answer 1

$\begin{gathered} \frac{2.5}{100}\times1500=\frac{3750}{100}=37.5 \\ \frac{2.5}{100}\times1537.5=\frac{3843.75}{100}=38.4375 \\ \frac{2.5}{100}\times1575.9375=\frac{3939.84375}{100}=39.3984375 \\ \frac{2.5}{100}\times1615.3359375=\frac{4038.33984375}{100}=40.3833984375 \\ \\ \text{account balance for 4 years = 1500 +}40.3833984375+39.3984375+38.4375+37.5 \\ \text{balance = }1655.71933594\text{ dollars} \end{gathered}$