You are saving money for a down payment on a new house. You intend to place $7,500 at the end of each year for three years into an account earning 5% per year. At the end of the fourth year, you will place $10,000 into this account. How much money will be in the account at the end of the fourth year?

$37,848.9

Explanation:

We can use the interest rate formula to figure out how much is in the account after the first 3 years. The interest rate formula is show below:

Let me delineate what each part of this equation means:

A = The total amount

P = The initial amount of money put into the account

R = the interest rate

T = Time

The equation gives us the following:

First, let's calculate the P in the equation.

You put $7,500 each year for 3 years, so multiply 7,500 by 3.

Next, let's start putting everything into the equation, like this:

(When doing interest rate you have to move the decimal over twice)

Now that we have the equation, let's solve it!

After 3 years $26,046.6 is in the account.

But, don't forget the last part of the question!

But you have a fourth year too!

Add the $10,000 onto the $26,046.6

That equals $36,046.6.

Lets plug this back into the equation for the final year

Thus, the final answer will be $37,848.9

Hope this helps!

- Kay :)

true basically. have an awesome day ya'll.