Answer:
225117.93818
Step-by-step explanation:
125000(1.04)^15
Katy's savings account will have $200,000 after 15 years, when she saves $125,000 now, and 4% is added to her account each year. Ignoring compounding and taxes, we followed the Simple Interest Method.
Interest is the sum paid by the user of the fund to the investor of the fund, for lending the user his/her money.
In the question, we are informed that Katy has saved $125,000, and she invests this in a savings fund that adds 4% to it each year.
We are asked to find the amount in her savings account after 15 years, assuming that there is no compounding, no taxes and that Katy doesn't add any more money to her account.
If we ignore compounding, then we are supposed to follow the simple interest method, in which the final amount is given as,
A = P(1 + nr), where A is the final amount, P is the principal sum invested, n is the time for investment, and r is the rate of interest.
Therefore, the amount in Katy's account after 15 years can be calculated as,
A = 125000(1 + 15*0.04) = 125000(1 + 0.60) = 125000 * 1.60 = 200,000.
Therefore, Katy's savings account will have $200,000 after 15 years, when she saves $125,000 now, and 4% is added to her account each year. Ignoring compounding and taxes, we followed the Simple Interest Method.
Learn more about the Simple Interest Method at
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