# 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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