SOLUTION: Mrs. Niss put $500 in a savings account upon opon which the bank pays an annual yeild of 4%. Because 4% of $500 is $20, and 10 times 20 is $200, Mrs. Niss thinks that the amount in

Algebra ->  Algebra  -> Quadratic Equations and Parabolas  -> Quadratic Equations Lessons -> SOLUTION: Mrs. Niss put $500 in a savings account upon opon which the bank pays an annual yeild of 4%. Because 4% of $500 is $20, and 10 times 20 is $200, Mrs. Niss thinks that the amount in      Log On

Ad: You enter your algebra equation or inequality - Algebrator solves it step-by-step while providing clear explanations. Free on-line demo .
Ad: Algebra Solved!™: algebra software solves algebra homework problems with step-by-step help!
Ad: Algebrator™ solves your algebra problems and provides step-by-step explanations!

   

Question 83064: Mrs. Niss put $500 in a savings account upon opon which the bank pays an annual yeild of 4%. Because 4% of $500 is $20, and 10 times 20 is $200, Mrs. Niss thinks that the amount in the account after 10 years will be $700($500 + $200). explain why this reasoning is incorrect. If the annual yield continues to be 4%, what will be the amount in the account after 10 years?
Answer by stanbon(57412) About Me  (Show Source):
You can put this solution on YOUR website!
Mrs. Niss put $500 in a savings account upon opon which the bank pays an annual yeild of 4%. Because 4% of $500 is $20, and 10 times 20 is $200, Mrs. Niss thinks that the amount in the account after 10 years will be $700($500 + $200). explain why this reasoning is incorrect. If the annual yield continues to be 4%, what will be the amount in the account after 10 years?
--------------------
The interest earned each year must be included in the amount that increases
by 4%.
A(t)=500(1+0.04)^10 = $740.12
Cheers,
Stan H.