Answer
(a) $\$57,457.3$
(b) $\$7,457.3$
Work Step by Step
(a)
We look at the table on page 453 in the textbook. We look up the column "3 years" and the row "4% interest" in the table. This gives us the value "1.1249". We multiply the principal ($\$25000$) by this number:
$25000*1.1249=\$28122.5$
Next, Christine deposits another $\$25000$ for 2 more years. We look up "4%" and "2 years" in the same table to get "1.0816". We multiply this by the current total accumulated:
$(28122.5+25000)*1.0816=\$57,457.3$
Thus Christine will have $\$57,457.3$ after 5 years.
(b)
To find the total interest earned, we subtract from the total in part (a) the original principal invested ($\$25000$) and the added deposit (another $\$25000$):
$57457.3-25000-25000=\$7457.3$
