Answer:
See the answers below
Step-by-step explanation:
Given data
Account 1 SImple interest
P= $2500
R=4%
T= 3 years
A=P(1+rt)
A=2500(1+0.04*3)
A=2500(1+0.12)
A=2500*1.12
A= $2800
Account 2 compound interest
P= $2500
R=4%
T= 3 years
A= P(1+r)^t
A=2500(1+0.04)^3
A=2500(1.04)^3
A=2500*1.124864
A= $2812.16
Answer: the answer is $5.612.16
Step-by-step explanation: Part 1) Account I earns 4% annual simple interest.
we know that
The simple interest formula is equal to
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest
t is Number of Time Periods
in this problem we have
substitute in the formula above
Part 2) Account II earns 4% interest compounded annually.
we know that
The compound interest formula is equal to
A=P(1+rt)
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
t=3 years
p=$2,500
r=4%=4/100=0.04
substitute in the formula above
A=2,500(1+0.04 * 3)
A=2,500 (1.12)
A=$2,800
Part 3) What is the sum of the balances of Account I and Account II at the end of 3 years?
Sum the two final investment
$2,800 + $2,812.16 = $5.612.16
