Zachary invests $400 into an account that earns 3.5% simple interest for 5 years. He does not make any other deposits or withdrawals.

At the end of 5 years, Zachary invests the entire account balance into a different account that earns 5% simple interest. He leaves the money in the account for 2 years without making any additional deposits or withdrawals.

What is the new account balance at the end of 2 years?

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Zachary invests $Response area into the account that earns 5% simple interest. At the end of 2 years, the account balance is $Response area.

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Answer:

Zachary invests $470 into the account that earns 5% simple interest. At the end of 2 years, the account balance is $517

Step-by-step explanation:

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The new account balance at the end of 2 years is $517.

Simple interest

5 years

Using this formula

I= (P+r×t)

Where:

I=Interest=?

P=Principal=$400

r=Interest rate=3.5%

t=Time=5 years

Hence:

I= ($400×0.035 x 5)

I= $70

2 years

I=Interest=?

P=Principal=$470

r=Interest rate=5%

t=Time=2 years

I=($470+0.05×2)

I=$47

New balance:

New balance=$400+$70+$47

New balance=$517

Inconclusion the new account balance at the end of 2 years is $517.

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