You invest $500 at 4% annual interest. After one year, you invest the total amount at 5% for another year. How much do you have after 2 years?
Answer
$546
How to solve it
1
Year 1: $500 × 1.04 = $520
2
Year 2: $520 × 1.05 = $546
Hints
Calculate first year with 4% interest
Use that result for second year with 5% interest