Question

r opens a new investment account with a $10,000.00 deposit!
ment account earns 3.5% interest, compounded annually.
as owner does not plan to make any deposits or withdrawals.
at will the investment account earn at the end of the first and second years?
ments about the investment account after one and two years,

answer from each drop down menu to complete the statements.
arn - choose the correct answer - * in interest at the end of the first year.
second year, the account will have earned a total of - choose the correct answer - * in interest.

Explanation:

Step1: Calculate interest for first year

The formula for simple interest (since compounded annually, first year is same as simple) is $I = P \times r \times t$, where $P = 10000$, $r = 3.5\% = 0.035$, $t = 1$. So $I = 10000 \times 0.035 \times 1 = 350$.

Step2: Calculate amount after first year

Amount $A_1 = P + I = 10000 + 350 = 10350$.

Step3: Calculate interest for second year

For second year, principal is $A_1 = 10350$. Interest $I_2 = 10350 \times 0.035 \times 1 = 362.25$.

Step4: Total interest after two years

Total interest = $350 + 362.25 = 712.25$.

Answer:

At the end of the first year, the account earns $\boldsymbol{350}$ in interest. At the end of the second year, the total interest earned is $\boldsymbol{712.25}$.