A bank account starts with $100 and earns 4% interest annually. How much money will be in the account after 12 years assuming no transactions have occurred. Round to the nearest cent. Jim received a $2000 loan from his bank. The loan accrues 3% interest every 3 months. How much will Jim owe the bank after 4 years? Round to the nearest cent?
Accepted Solution
A:
a] The future amount of an invested is given by: A=P(1+r/100)^t where: A=amount P=principle r=rate t=time thus the amount after 12 years will be: A=100(1+4/100)^12 A=$160.10
b] The amount that Jim will owe the bank after 4 years will be given by; A=p(1+r/200n)^nt A=amount p=principle=2000 r=rate=4Γ3=12% p.a t=time=4 years n=number of terms=4 thus: A=2000(1+0.03)^16 A=$3209.41 Jim will owe the bank $3209.4 after 4 years