Sam Just opened a savings account paying 3.5 percent interest, compounded annual

Question

Sam Just opened a savings account paying 3.5 percent interest, compounded annually. After four years, the savings account will be worth $5,000. Assume there are no additional deposits or withdrawals. Given this, Sam: Multiple Choice will earn the same amount of Interest each year for four years will earn simple interest on his savings every year for four years. could have deposited less money today and still had $5.000 In four years If the account pald a higher rate of interest. has an account currently valued at $5,000. could earn more Interest on this account if the Interest earnings were withdrawn annually.

Explanation / Answer

Option C. Of all the options provided the option c is correct because it says if deposited less and earned more interest we can reach 5000 in 4 years. it is possible to achieve. and the remaining options provided are fundamentally wrong saying. a Same amount of interest every year is wrong because in compounding we will earn higher interest than the previous year and saying simple interest and earnings more if withdrawn annually are wrong. Thus Option C is the only correct answer

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.