Miss Calledo deposited P 1,000, P 1,500 and P 2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings account which earned 10% per annum. How much is in the account at the end of the 4th year?

Solution(By Examveda Team)

Explanation:

We can solve this problem using the future value formula for a series of deposits:

Future Value = P(1 + r)^n

Where:
P is the deposit amount
r is the annual interest rate
n is the number of years
In this case, Miss Calledo made three deposits:
P 1,000 at the end of the 2nd year
P 1,500 at the end of the 3rd year
P 2,000 at the end of the 4th year
Let's calculate the future value of each deposit separately and then add them up:

For the first deposit:
P1 = 1000 (the principal amount)
r = 10% (0.10 as a decimal)
n = 4 - 2 = 2 years
Future Value₁ = 1000 * (1 + 0.10)^2 = 1000 * (1.10)^2

For the second deposit:
P2 = 1500
n = 4 - 3 = 1 year
Future Value₂ = 1500 * (1 + 0.10)^1 = 1500 * (1.10)^1

For the third deposit:
P3 = 2000
n = 4 - 4 = 0 years
Future Value₃ = 2000 * (1 + 0.10)^0 = 2000 * 1

Now, add up the future values of all three deposits:
Total Future Value = Future Value1 + Future Value2 + Future Value3

Total Future Value = 1000 * (1.10)^2 + 1500 * (1.10)^1 + 2000 * 1

Total Future Value = 1210 + 1650 + 2000

Total Future Value = 4860

So, the amount in the account at the end of the 4th year is P 4,860.00. Therefore, the correct answer is Option C.