sam invested $5000 in a GIC earning 8% compound interest per year, the interest gets added to the amount invested, so the next year sam gets the interest on the interest already earned , as well as on te original amoun, how much will sam's investment be worth at the end of 10 years
what is 5000(1.08)^10 ??
how did u get that formula?
Fftf
To find out how much Sam's investment will be worth at the end of 10 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, Sam invested $5000, the interest rate is 8% (or 0.08 as a decimal), and the interest is compounded annually (n = 1) over 10 years (t = 10).
Plugging these values into the formula:
A = 5000(1 + 0.08/1)^(1*10)
A = 5000(1.08)^10
Calculating 1.08 raised to the power of 10:
A = 5000(1.08)^10
A ≈ 5000(1.857)
A ≈ $9,283.68
Therefore, Sam's investment will be worth approximately $9,283.68 at the end of 10 years.