Finance

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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?

  • Finance -

    Is the interest compounded?

    Compounded daily, quarterly, yearly, etc ?

  • Finance -

    It doesn't indicate

  • Finance -

    $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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