Revision as of 22:03, 26 November 2023 by Admin (Created page with "A person deposits 100 at the beginning of each year for 20 years. Simple interest at a rate of i per year grows the account to 2840 at the end of 20 years. If compound interest at the same rate i had been used, what would be the accumulated value in the account after 20 years? <ul class="mw-excansopts"><li>2890</li><li>3100</li><li>3200</li><li>3310</li><li>3470</li></ul> '''References''' {{cite web |url=https://web2.uwindsor.ca/math/hlynka/392oldtests.html |last=Hlyn...")
ABy Admin
Nov 26'23
Exercise
A person deposits 100 at the beginning of each year for 20 years. Simple interest at a rate of i per year grows the account to 2840 at the end of 20 years. If compound interest at the same rate i had been used, what would be the accumulated value in the account after 20 years?
- 2890
- 3100
- 3200
- 3310
- 3470
References
Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.
ABy Admin
Nov 26'23
Solution: B
[[math]]
2840=100(1+20 i)+100(1+19 i)+\cdots+100(1+i)=2000+i * 100(21)(20) / 2 \text { so } i=16.80 / 420=.04
[[/math]]
Using compound interest, accumulated amount is
[[math]]
100 \ddot{s}_{\overline{20} \mid .04}=100 \frac{1.04^{21}-1.04}{.04}=3096.92
[[/math]]
References
Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.