if I deposited $100 in your savings account today, how much will you have 10 years from now if your account pays compound intrest once a year and the annual intrest rate is 4%
What is
100(1.04)^10 ?
To calculate the future value of your savings account after 10 years with compound interest, we can use the formula:
Future Value = Principal Amount × (1 + Interest Rate)^Number of Periods
In this case:
- Principal Amount (P) = $100 (initial deposit)
- Interest Rate (r) = 4% = 0.04 (annual interest rate)
- Number of Periods (n) = 10 years
Now we can plug these values into the formula and calculate the future value:
Future Value = $100 × (1 + 0.04)^10
Calculating (1 + 0.04)^10, we get approximately 1.48886.
Therefore, the future value of your savings account after 10 years would be:
Future Value ≈ $100 × 1.48886
Future Value ≈ $148.89
So, if you deposit $100 in the savings account today with a 4% annual interest rate compounded annually, you would have approximately $148.89 after 10 years.