Question
If you deposit $10,000 in a bank account that pays 10 percent interest annually, how much money will be in your account after 5 year?
Answers
~christina~
10,000 x .10 = 1000 interest a year
5 years x 1000= $5000
10,000 + 5000 = $15,000
(If you didn't spend any of the 10,000 of course lol.
5 years x 1000= $5000
10,000 + 5000 = $15,000
(If you didn't spend any of the 10,000 of course lol.
Ms. Sue
Christina's answer doesn't take into account that you'll be paid interest on the interest.
After the first year, you'll have $11,000 in your account -- $10,000 + 1,000.
The second year:
11,000 x .1 = 1,100
11,000 + 1,100 = 12,100
The third year:
12,100 x .1 = 1,210
12,100 + 1,210 = 13,310
Fourth year:
13,310 x .1 = 1,331
13,310 + 1,331 = 14,641
14,641 x .1 = 1,644.1
14,641 + 1,644.1 = $16,285.10
It looks like at the end of 5 years, you'll have $16,285.10 in your account. Check my figures.
After the first year, you'll have $11,000 in your account -- $10,000 + 1,000.
The second year:
11,000 x .1 = 1,100
11,000 + 1,100 = 12,100
The third year:
12,100 x .1 = 1,210
12,100 + 1,210 = 13,310
Fourth year:
13,310 x .1 = 1,331
13,310 + 1,331 = 14,641
14,641 x .1 = 1,644.1
14,641 + 1,644.1 = $16,285.10
It looks like at the end of 5 years, you'll have $16,285.10 in your account. Check my figures.
Mark
Actually Sue your calculations were correct up until the 5th year you accidentally wrote 1,644.1 instead of 1,464.1 ...
The correct answer for this question is Year 5 you will have $16,105.10
Hope this helps
best
The correct answer for this question is Year 5 you will have $16,105.10
Hope this helps
best
Natasha Nowrin
This question will follow the formula of future value.
Where,
FV= PV( 1+i)^n
FV= 10000( 1+. 10)^5
FV= 16,105.1
Where,
FV= PV( 1+i)^n
FV= 10000( 1+. 10)^5
FV= 16,105.1