As the question is not clear about the calculation needed, so i will calculate in both ways - compound interest and simple interest.
Given are:
Amount = $500
Rate of interest = 4% or 0.04
Time = 25
n = 1(compounded annually)
Formula for compound interest :
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
Putting values in the formula:
A= [tex]500(1+\frac{0.04}{1})^{25}[/tex]
= [tex]500(1.04)^{25}[/tex]
= 500*2.665 = $ 1332.50
Hence, amount in the account after 25 years = 500+1332.50= $1832.50
Formula for simple interest:
S.I.=[tex]\frac{p*r*t}{100}[/tex]
= [tex]\frac{500*4*25}{100}[/tex]
Interest = 500
Hence, amount in the account after 25 years = 500+500 = $1000
The amount that would be in the account with compounding is $1000.
The amount that would be in the account using simple interest is $1332.92.
Value = amount invested + (principal x time x interest rate)
$500 + (500 x 0.04 x 25) = $100
FV = P (1 + r)^nm
FV = Future value
P = Present value
R = interest rate
m = number of compounding
N = number of years
$500 x (1.04)^25 = $1332.92
To learn more about future value, please check: https://brainly.com/question/18760477
