Gabe deposits $2,500 into each of two savings accounts. Account ONE earns 4% annual simple interest.
Account TWO earns 4.5% interest compounded annually.
What is the sum of the balances of Accounts ONE and TWO at the end of 3 years?

$5,612.16

Step-by-step explanation:

Part 1) Account I earns 4% annual simple interest.

we know that

The simple interest formula is equal to A = P (1+rt)

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  

t is Number of Time Periods

in this problem we have:

t = 3 years

P = $2,500

r = 4% = 4/100 = 0.04

substitute in the formula above

A = 2,500 (1 + 0.04 * 3)

A = 2,500 (1.12)

A = $2,800

Part 2) Account II earns 4% interest compounded annually.

we know that    

The compound interest formula is equal to: A = P (1 + r/n)nt

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

t = 3 years

P = $2,500

r = 4% = 4/100 = 0.04

n = 1

substitute in the formula above  

A = 2,500 * (1 + 0.04/1)3

A = 2,500 * (1.04)3

A = $2,812.16

Part 3) What is the sum of the balances of Account I and Account II at the end of 3 years?

Sum the two final investment:

$2,800 + $2,812.16 = $5,612.16

The reduced insurance cost  is £685.42.

Step-by-step explanation:

The amount paid per year for insurance = £714.73

Now the price is reduced by  4.1%

Calculating  4.1% of the  amount £ 714.73, we get:

4.1% of 714.73   =  

⇒4.1% of £ 714.73  = £29.30

So, the reduced insurance amount =   £ 714.73  -  £29.30

                                                                        = £685.42

Hence, the reduced insurance cost  is £685.42.