Find the balance after 10 years of a $30,000 savings account that pays 10% interest compounded yearly.
answers:
$77,812.27
$2,245,256.05
$112,070.90
$33,154.81
To find the balance after 10 years of a $30,000 savings account that pays 10% interest compounded yearly, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = principal amount (initial balance)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, P = $30,000, r = 10% = 0.10, n = 1 (compounded yearly), and t = 10.
Plugging the values into the formula:
A = 30000(1 + 0.10/1)^(1*10)
A = 30000(1 + 0.10)^10
A = 30000(1.10)^10
A ≈ 30000(2.5941)
A ≈ $77,823.00
Therefore, the correct answer is $77,812.27.