You want to buy a jet ski 5 years from now, and you plan to save $600 per year, beginning today. you will deposit your savings in an account that pays 8% interest. how much will you have 5 years from now?

Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. The Balance after the fifth year from now is 3801.56.

What is simple interest?

Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. It is calculated with the help of the formula,

SI = PRT

where SI is the simple interest, P is the principal amount, R is the rate of interest, and T is the time period.

The balance in the accounts can be calculated as,

Balance after the first year,

A = 600×(1.08) = 648

Balance after the second year,

A = (600+648)(1.08) = 1248(1.08) = 1347.84

Balance after the third year,

A = (1347.84+600)(1.08) = 1947.84 (1.08) = 2103.67

Balance after the fourth year,

A = (2103.67+600)(1.08) = 2703.67 (1.08) = 2919.96

Balance after the fifth year,

A = (2919.96+600)(1.08) = 3519.96 (1.08) = 3801.56

Hence, the Balance after the fifth year from now is 3801.56.

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