Sam invested $5000 in a GIC earning 8% compound interest per year. The interest gets added to the amount invested, so the next year Sam gets interest on the interest already earned as well as on the original amount. How much will Sam's investment be worth at the end of 10 years?

Question

Please answer ASAP, thanks.

Answer 1

how is the interest compounded?
ie, daily, quarterly, semiannually, annually, or ?

Answer 2

I'm not sure, the question doesn't say anything about that specifically, but I'm guessing it's annually?

Answer 3

A(t) = P (1 + r/n)^nt
A(10) = 5000 ( 1 + .08/1)^1*10
A(10) = 5000 ( 1.08)^10
A(10) = 5000 ( 2.15892 )
A(10) = 10,794.60
5000 + 10794.60 = 15794.60

I'm not a tutor, but I've done this type
problem here before

Answer 4

Thank you!

Answer 5

you're welcome!