Question

A bank offers a long-term savings account with a $1.0\%$ annual interest rate. At the end of each year, the interest is rounded down to the nearest cent and added to the principal. If the initial deposit was 1500$,thentheinterestthattheaccountearnedattheendof$5$yearsis$I$.Findthevalueof$2I$?

Answer 1

Rate of Interest $=1\%$

Initial deposit $=$1500$4

time $=5years$.

Amount after 1st year

$=\frac{1500\times 1\times 1}{100}=$15$

Final amount 1500+$15=$1515$.

Amount after 2nd year $=\frac{1515\times 1\times 1}{100}$ $=$15.15$

Final amount $=1515+15.15=$1530.15$

Amount after 3rd year $=\frac{1530.15\ast 1\ast 1}{100}$ $=$15.3015$

FInal amount $=$15.3015 + $1530.15$

$=$1545.4515$

Amount after 4th year $=\frac{1545.4515\times 1\times 1}{100}$

$=$1560.906$

Amount after 5th year $=\frac{1560.906\times 1\times 1}{100}$ $=$15.60906$

Interest, $I=$1560.906+15.60906$

$=$1576.51506$

$2I=$2\times1576.51506$

$=$3153.03012$