Robert won $900,000 in the North Carolina State Lottery. After paying $350,000 in taxes, he invested the remaining money in a savings account with a 4.25% interest rate. How much money is in the account if Robert makes no deposits or withdrawals for two years?
(900,000-350,000)x 4.25% x 2=?
550,000 x 4.25% x 2 = ?
23,375 x 2 = ?
$46,750
Robert won $900,000 in the North Carolina State Lottery. After paying $350,000 in taxes, he invested the remaining money in a savings account with a 4.25% interest rate. How much total money is in the account if Robert makes no deposits or withdrawals for two years?
Answer
To find out how much money is in the account after two years, we need to calculate the interest earned on the remaining money after taxes.
Step 1: Calculate the money remaining after taxes.
Subtract the amount paid in taxes from the total winnings.
$900,000 - $350,000 = $550,000
Step 2: Calculate the interest earned.
Multiply the remaining money by the interest rate (expressed as a decimal) and the number of years.
$550,000 x 0.0425 x 2 = $46,750
Step 3: Calculate the total amount in the account after two years.
Add the interest earned to the remaining money after taxes.
$550,000 + $46,750 = $596,750
Therefore, after two years, Robert will have $596,750 in the savings account if he makes no deposits or withdrawals.