a person deposited $500 in a savings account that pays 5% annual interest that is compounded yearly. at the end of 10 years, how much money will ve in the savings account?
what is
500(1.05)^10 ?
To calculate the amount of money that will be in the savings account at the end of 10 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future amount (the amount in the savings account at the end of 10 years)
P = the principal amount (the initial deposit of $500)
r = the annual interest rate (5% or 0.05)
n = the number of times interest is compounded per year (1 in this case since it is compounded yearly)
t = the number of years (10 in this case)
Now we can substitute these values into the formula and calculate the future amount:
A = 500(1 + 0.05/1)^(1*10)
A = 500(1 + 0.05)^10
A = 500(1.05)^10
A = 500 * 1.6487212707...
A ≈ $824.36
Therefore, at the end of 10 years, there will be approximately $824.36 in the savings account.