ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Ms. Wiggins made deposits into two savings accounts:-$2, 000 in a simple interest account with a 5% interest rate-$4, 000 in a compound interest account with 4% interestAssuming she makes no additional deposits, or withdrawals; what will the combined value of the two accounts be after 10 years?
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Mrs. Wright says the combined value will be $8, 920.98.
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Nurse Wright says the combined value will be $6, 920.98.
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -Say you have a savings account with $10, 000 that earns 2% interest per year. Expressed as a decimal, the interest rate is 0.02, so the formula would be: Interest = $10, 000 x 0.02 x 1, which equals $200. Interest rates in the best savings accounts are above 2%.
Detailed explanation-2: -I=10020000×2×5=Rs. 2, 000. Was this answer helpful?
Detailed explanation-3: -Summary: The future value of $10, 000 on deposit for 2 years at 6% simple interest is $11200.
Detailed explanation-4: -The future value of $10, 000 with 6 % interest after 5 years at simple interest will be $ 13, 000.
There is 1 question to complete.