What will Sandro's balance be in his bank account at the end of 2024 if he starts with an initial deposit of €2000, invests an additional €2000 at the beginning of each year, and the account earns 3% interest compounded annually?

Answer

To find Sandro's balance at the end of 2024, we can break down the interest calculations year by year and account for the annual contributions he makes. 1. **Initial Deposit (Year 2022)**: Sandro opened the account with an initial deposit of €2000. - End of 2022 Balance = Initial Deposit × (1 + Interest Rate) = €2000 × (1 + 0.03) = €2000 × 1.03 = €2060 2. **First Contribution (Beginning of 2023)**: At the beginning of 2023, he adds another €2000. - Total at the beginning of 2023 = End of 2022 Balance + Contribution = €2060 + €2000 = €4060 - End of 2023 Balance = Total × (1 + Interest Rate) = €4060 × 1.03 = €4060 × 1.03 = €4181.80 3. **Second Contribution (Beginning of 2024)**: At the beginning of 2024, he contributes another €2000. - Total at the beginning of 2024 = End of 2023 Balance + Contribution = €4181.80 + €2000 = €6181.80 - End of 2024 Balance = Total × (1 + Interest Rate) = €6181.80 × 1.03 = €6181.80 × 1.03 = €6377.84 Thus, the balance at the end of 2024 will be €6377.84.