Explanation Given: Principal amount for account A is $ 1000 . Principal amount for account B is $ 1000 . The interest rate of account A is 4% / year at simple interest. The interest rate of account B is 4% / year compounded monthly. The given table is End of Year 1 5 10 20 30 Accumulated Amount in Account A ($) Accumulated Amount in Account B ($) Approach: Write the expression to obtain the accumulated amount. A = P ( 1 + r m ) t × m Here, A is the accumulated amount, P is the principal amount, r is the interest rate, t is the time period in years and m is the number of periods per year. Write the expression to obtain the accumulated amount when r is the simple interest. A = P ( 1 + r t ) Here, A is the accumulated amount, P is the principal amount, r is the simple interest rate and t is the time period in years Calculation: The period per year is, m = 12 Calculate the accumulated amount of Account A. Principal Amount($) ( P ) Interest Rate(%) ( r ) Time Period t Accumulated Amount ($) ( A ) A = P ( 1 + r t ) 1000 4 1 1000 ( 1 + ( 0.04 × 1 ) ) = 1040 1000 4 5 1000 ( 1 + ( 0.04 × 5 ) ) = 1200 1000 4 10 1000 ( 1 + ( 0.04 × 10 ) ) = 1400 1000 4 20 1000 ( 1 + ( 0.04 × 20 ) ) = 1800 1000 4 30 1000 ( 1 + ( 0.04 × 30 ) ) = 2200 Table ( 1 ) Calculate the accumulated amount of Account B. Principal Amount($) ( P ) Interest Rate(%) ( r ) Period per year

Finite Mathematics for the Managerial, Life, and Social Sciences

12th Edition

ISBN: 9781337405782

Author: Soo T. Tan

Publisher: Cengage Learning

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Chapter 5.1, Problem 31E

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The given table to record the accumulated amounts of each investment at the end of year 1, year 5, year 10, year 20, and year 30

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Chapter 5 Solutions

Finite Mathematics for the Managerial, Life, and Social Sciences

Ch. 5.1 - Explain the difference between simple interest and...Ch. 5.1 - Prob. 2CQ Ch. 5.1 - Prob. 3CQ Ch. 5.1 - Find the simple interest on a 500 investment made...Ch. 5.1 - Prob. 2E Ch. 5.1 - Find the accumulated amount at the end of 9months...Ch. 5.1 - Find the accumulated amount at the end of 8months...Ch. 5.1 - Prob. 5E Ch. 5.1 - A bank deposit paying simple interest at the rate...Ch. 5.1 - How many days will it take for 1000 to earn 20...

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The given table to record the accumulated amounts of each investment at the end of year 1 , year 5 , year 10 , year 20 , and year 30

Solution Summary: The author explains how to calculate the accumulated amounts of each investment at the end of year.

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To complete:

The given table to record the accumulated amounts of each investment at the end of year 1, year 5, year 10, year 20, and year 30

Chapter 5 Solutions

The given table to record the accumulated amounts of each investment at the end of year 1 , year 5 , year 10 , year 20 , and year 30

Solution Summary: The author explains how to calculate the accumulated amounts of each investment at the end of year.

Concept explainers

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To complete: The given table to record the accumulated amounts of each investment at the end of year 1, year 5, year 10, year 20, and year 30

Chapter 5 Solutions

To complete:

The given table to record the accumulated amounts of each investment at the end of year 1, year 5, year 10, year 20, and year 30