Assume you put $8,000 in a savings account and leave it there for four years.If you get a compounded yearly interest rate of 5% the first two years but only 4% the last two years, how much will be in the account after the four years?

Question

Quizplus · Accepted Answer

To calculate the amount in the account after four years with varying interest rates, you apply the compound interest formula for each period separately. For the first two years at 5% interest: $8,000 * (1 + 0.05)^2 = $8,820. For the last two years at 4% interest: $8,820 * (1 + 0.04)^2 = $9,540.

Assume You Put $8,000 in a Savings Account and Leave