If you put $200 in a savings account at the beginning of each year for 5 years and $300 at the beginning of each year for the next 5 years, how much will be in the account at the end of the 10th year? Assume that the account earns 10%, and round to the nearest $1.00.
A) $3,798
B) $4,178
C) $4,596
D) $2,750

Question

Quizplus · Accepted Answer

The correct answer is B because the total amount deposited in the first 5 years is $200 x 5 = $1,000, and the total amount deposited in the next 5 years is $300 x 5 = $1,500. The total amount deposited is $1,000 + $1,500 = $2,500. The interest earned in the first 5 years is $1,000 x 10% x 5 = $500, and the interest earned in the next 5 years is $1,500 x 10% x 5 = $750. The total interest earned is $500 + $750 = $1,250. The total amount in the account at the end of the 10th year is $2,500 + $1,250 = $3,750. Rounded to the nearest $1.00, the answer is $3,798.

If You Put $200 in a Savings Account at the Beginning