Luke deposits 3,500 into each of two savings accounts account one earns 3% annual simple interest account to earns 3% interest compound annually Luke does not make any additional deposits or withdrawals what is the sum of the balance and of count 1 and account two at the end of 4 years
To find the balance in each account after 4 years, we can use the formula for simple interest:
Simple Interest = Principal * Interest Rate * Time
For account one, we have:
Principal = $3,500
Interest Rate = 3% = 0.03
Time = 4 years
Simple Interest for account one = 3500 * 0.03 * 4 = $420
So, the balance in account one after 4 years will be $3,500 + $420 = $3,920.
For account two, we need to calculate compound interest. The formula for compound interest is:
Compound Interest = Principal * (1 + Interest Rate)^Time - Principal
Principal = $3,500
Interest Rate = 3% = 0.03
Time = 4 years
Compound Interest for account two = 3500 * (1 + 0.03)^4 - 3500 = $447.27
So, the balance in account two after 4 years will be $3,500 + $447.27 = $3,947.27.
The sum of the balances in account one and account two after 4 years is $3,920 + $3,947.27 = $7,867.27.