Nicolas has $650 to deposit into two different savings accounts.
Nicolas will deposit $400 into Account I, which earns 3.5% annual simple interest.
He will deposit $250 into Account II, which earns % interest compounded annually.
Nicolas will not make any additional deposits or withdrawals. What is the total balance of these two accounts at the end of 2 years?
Nicolas has $650 to deposit into two different savings accounts.
Nicolas will deposit $400 into Account I, which earns 3.5% annual simple interest.
He will deposit $250 into Account II, which earns % interest compounded annually.
Nicolas will not make any additional deposits or withdrawals. What is the total balance of these two accounts at the end of 2 years?
$672.13
$695.00
$694.25
$694.51
To calculate the total balance at the end of 2 years for Account I, we use the formula for simple interest:
Total Balance for Account I = Principal + (Principal x Rate x Time)
Total Balance for Account I = $400 + ($400 x 0.035 x 2)
Total Balance for Account I = $400 + $28
Total Balance for Account I = $428
For Account II, we need to keep in mind that the interest is compounded annually. Therefore, we use the formula:
Total Balance for Account II = Principal x (1 + Rate)^Time
Total Balance for Account II = $250 x (1 + Rate)^2
Since the rate for Account II is not given, we cannot calculate the exact amount for Account II. Therefore, we add the total balances for Accounts I and II:
Total Balance = $428 + Total Balance for Account II
Although we cannot calculate the exact amount for Account II, the total balance would be more than $428, so the answer is closest to $672.13.