Thank you for visiting After several years of working Katy has saved 125 000 If she invests that 125 000 in a savings fund that adds 4 each year. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
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.
What is interest?
Interest is the sum paid by the user of the fund to the investor of the fund, for lending the user his/her money.
How to solve the given question?
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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Rewritten by : Jeany
Answer:
225117.93818
Step-by-step explanation:
125000(1.04)^15
