Adam place RM2, 000 in a saving account paying 5% interest compounded annually, how much will Adam account accrue to in
a)10 years
b)15 years
To calculate the amount of money Adam's account will accrue to in each scenario, we can use the formula for compound interest:
A = P(1 + r/n)^(n*t)
Where:
A is the final amount
P is the principal amount (initial deposit)
r is the annual interest rate (expressed as a decimal)
n is the number of times the interest is compounded per year
t is the number of years
In this case, Adam placed RM2,000 in a savings account with an interest rate of 5% compounded annually.
a) 10 years:
Using the formula, we can substitute the values:
A = 2000(1 + 0.05/1)^(1*10)
A = 2000(1.05)^10
A ≈ 2000 * 1.6289
A ≈ RM3,257.80
b) 15 years:
Using the same formula:
A = 2000(1 + 0.05/1)^(1*15)
A = 2000(1.05)^15
A ≈ 2000 * 1.8396
A ≈ RM3,679.20
Therefore, Adam's account will accrue to approximately RM3,257.80 in 10 years and approximately RM3,679.20 in 15 years.