A deposit of $440 earns interest rates of 8.4 percent in the first year and 10.4 percent in the second year. What would be the second year future value?

Question

A deposit of $440 earns interest rates of 8.4 percent in the first year and 10.4 percent in the second year. What would be the second year future value?

Answer 1

WRONG!

If by standard compound interest ...
amount = 440(1.084)(1.104) = 526.56

If simple interest (not likely)
interest in 1st year = 440(.084) = 36.96
interest in 2nd year = 440(.104) = 45.76
total in account = 440 + 36.96 + 45.76 = 522.72

The bot did not get either of those answers.

Answer 2

The second year future value would be $484.16. This is calculated by multiplying the initial deposit of $440 by the second year interest rate of 10.4%, which equals $45.76. Then add the initial deposit of $440 and the interest earned of $45.76 to get the future value of $484.16.