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fin

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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?

  • fin -

    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.

  • fin -

    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.

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