To find the balance after 10 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal amount (initial balance)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, we have:
P = $30,000
r = 10% = 0.10
n = 1 (compounded yearly)
t = 10 years
Plugging these values into the formula:
A = $30,000(1 + 0.10/1)^(1*10)
A = $30,000(1 + 0.10)^10
A = $30,000(1.10)^10
A = $30,000(2.5937)
A ≈ $77,812.50
After 10 years, the balance in the savings account will be approximately $77,812.50.
Find the balance after 10 years of a $30,000 savings account that pays 10% interest compounded yearly.
1 answer
1 answer