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# At the beginning of each year Jane puts $2,000 in  Question banks Downloads My Bookmarks Reviews Important topics Author Message TAGS: Moderator Joined: 18 Apr 2015 Posts: 5897 Followers: 96 Kudos [?]: 1154 [1] , given: 5478 At the beginning of each year Jane puts$2,000 in [#permalink]  30 Jul 2017, 08:24
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Question Stats:

50% (01:29) correct 50% (01:15) wrong based on 12 sessions

At the beginning of each year Jane puts $2,000 in an account that earns 6 % interest, compounded annually. To the nearest dollar, how much money will Jane have in the account at the end of 4 years if she makes no withdrawals? Round your answer to the nearest whole dollar:$

[Reveal] Spoiler:
$9,274 _________________ Director Joined: 03 Sep 2017 Posts: 521 Followers: 1 Kudos [?]: 344 [1] , given: 66 Re: At the beginning of each year Jane puts$2,000 in [#permalink]  28 Sep 2017, 06:31
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Given the formula for the compound interest rate $$A=P(1+\frac{r}{n})^{nt}$$, where P is the sum invested, A is the amount after interests, r is the interest rate and n is the number of times the interests are compounded in a year, the solution is pretty straightforward.

The interests are compounded once a year so that the formula reduces to $$A=P(1+0.06)^t$$. Then, we just have to compute the amount every year, remembering of adding 2000$at the beginning of every new year. Thus, the first year we will have 2000(1+0.06)^1=2120 The second year we will have (2120+2000)*(1+0.06)^1=4367.2 And so on for other two years until we reach our answer,$ 9,274