A man invest for 5 years at 10% p.a. compound interest. calculate the investment value at the end of 5 years.

Answer 1

To calculate the investment value at the end of 5 years with compound interest, we can use the formula:

A = P(1 + r/n)^(nt)

Where:
A = the amount of money accumulated after n years, including interest
P = principal amount (initial investment)
r = annual interest rate (decimal form)
n = number of times that interest is compounded per year
t = number of years the money is invested for

In this case:
P = the initial investment
r = 10% or 0.10
n = 1 (compounded annually)
t = 5 years

A = P(1 + 0.10/1)^(1*5)
A = P(1 + 0.10)^5
A = P(1.10)^5
A = P(1.61051)

So, the investment value at the end of 5 years with compound interest is 1.61051 times the initial investment.

For example, if the initial investment (P) is $1000, then:
A = $1000 * 1.61051
A = $1610.51

Therefore, the investment value at the end of 5 years with compound interest would be $1610.51.