Since your first birthday,your grandparents have been depositing $1000 into a savings account on every one of your birthdays.The account pays 4% interest annually.Immediately after your grandparents make the deposit on your 18th birthday,the amount of money in your savings account will be closest to:
A)$25,645.
B)$36,465.
C)$12,659.
D)$18,000.

Question

Quizplus · Accepted Answer

The amount of money in the savings account after 18 years is the sum of the 18 deposits, each of which is $1000, plus the interest earned on those deposits. The interest earned on each deposit is $1000 * 4% * n, where n is the number of years since the deposit was made. The total interest earned is the sum of the interest earned on each deposit, which is $1000 * 4% * (1 + 2 + 3 + ... + 18) = $1000 * 4% * (18 * 19 / 2) = $16,520. The total amount of money in the savings account after 18 years is $1000 * 18 + $16,520 = $25,645.

Since Your First Birthday,your Grandparents Have Been Depositing $1000 into a Savings