Finance

posted by help w/ business

If an investment of $5,000 today earns 5% in each of the next five years, and then earns 7% per year for five years after that, how much will the investment be worth at the end of the ten years?

  1. helper

    Is the interest compounded?

    Compounded daily, quarterly, yearly, etc ?

  2. help w/ business

    It doesn't indicate

  3. helper

    $5,000 @ 5% for 5 yrs
    then 7% for 5 yrs

    I = PRT
    I = 5000(0.05)(5)
    I = 250(5)
    I = 1250.00

    5000 + 1250.00 = 6250.00

    I = PRT
    I = 6250(0.07)(5)
    I = 437.50(5)
    I = 2187.50

    6250.00 + 2187.50 = 8437.50

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