Rick deposit is $1000 into an investment account which earns 4% interest annually. Sally loans what doesn’t dollars to a friend, and her friend agrees to pay her $50 each year, and will return the $1000 after 10 yearsDetermine the amount of money each person has after 10 years

Answer:After 10 yearsRick will have $1,480.24 Sally will have $1,500Step-by-step explanation:Data provided in the question: Principle amount = $1,000Now,For RickInterest rate by bank, r = 4% = 0.04Time period, n = 10 yearsNow,Final amount after 10 years with Rick using the compounding formulaFinal amount = Principle × (1 + r)ⁿ= $1,000 × (1 + 0.04 )¹⁰= $1,480.24 For SallyAmount paid each year = $50Therefore,Total amount paid in 10 years = $50 × 10= $500Thus,Final amount Sally will have after 10 years= $1,000 + Total amount paid in 10 years= $1,000 + $500= $1,500Hence,After 10 yearsRick will have $1,480.24 Sally will have $1,500