Earl opens a savings account with $5,000. He deposits $1500 each year into the account that compounds quarterly and has a 0.65% interest rate. What will his account total be in 5 years?

$14,331.46

$12,781.95

$35,632.71

$15,681.02

Question

Earl opens a savings account with $5,000. He deposits $1500 each year into the account that compounds quarterly and has a 0.65% interest rate. What will his account total be in 5 years?

 $14,331.46

 $12,781.95

 $35,632.71

 $15,681.02

dumbcow · Answer

its a geometric series
$$B = 5,000(1+i)^{20}+1500[1+(1+i)^{4}+(1+i)^{8}+(1+i)^{12}+(1+i)^{16}]$$
assuming he make deposit at end of year
i = .0065/4

use formula for sum of geometric series
$$B = 5,000(1+i)^{20} +1500\frac{(1+i)^{20}-1}{(1+i)-1}$$

anonymous · Answer

i bet everyones head is about to explode right now

anonymous · Answer

what i

anonymous · Answer

what's i

anonymous · Answer

whoops wasnt paying attention ok

anonymous · Answer

i didnt get the right answer

dumbcow · Answer

oh theres an error somewhere...the bottom of fraction should be (1+i)^4 -1
since thats whats being multiplied each time

dumbcow · Answer

still don't get their answer exactly...buts its pretty close to B

anonymous · Answer

yeah mine came close to b too.

dumbcow · Answer

also since this is multiple choice, its easy....imagine you earned no interest
--> 5000 + 1500*5 = 12,500

0.65% interest is really small so the earnings will be small , this leaves only 1 possible answer

anonymous · Answer

okay, thanks for helping dumbcow :))