document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=83064>Question 83064</A>: <I><SPAN STYLE=\"word-break: break-all;\"> 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? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #59619 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=59619\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> 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?<BR>\n" );
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document.write( "The interest earned each year must be included in the amount that increases<BR>\n" );
document.write( "by 4%.<BR>\n" );
document.write( "A(t)=500(1+0.04)^10 = $740.12<BR>\n" );
document.write( "Cheers,<BR>\n" );
document.write( "Stan H. </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );