You invest $1,300 in an account that has an annual interest rate of 5%, compunded anually. How much money will be in the account after 10 years?

Question

anonymous · Answer

Rounded to the nearest dollar would this be $1,950?

jim_thompson5910 · Answer

Now you're using the formula


A = P(1+r/n)^(nt)


In this case, P = 1300, r = 0.05, n = 1 and t = 10


So you'll get


A = 1300(1+0.05/1)^(1*10)

jim_thompson5910 · Answer

No it should be a bit higher than 1950

anonymous · Answer

Hmmm, I cant seem to figure out what I did wrong? =( Can you tell me what I should be getting?

jim_thompson5910 · Answer

let me write it out, one sec

jim_thompson5910 · Answer

A = 1300(1+0.05/1)^(1*10)


A = 1300(1+0.05/1)^(10)


A = 1300(1+0.05)^(10)


A = 1300(1.05)^(10)


A = 1300*1.62889462677744


A = 2117.56301481068


A = 2118

anonymous · Answer

Thank you sooo much!! =)

jim_thompson5910 · Answer

you're very welcome