37. 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 be in the savings
account?
500 * 1.05^10
To calculate the amount of money 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 value of the investment/loan, including interest
P = the principal investment amount (the initial deposit)
r = the annual interest rate (written as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case, the principal (P) is $500, the annual interest rate (r) is 5% (or 0.05 as a decimal), the interest is compounded yearly (n = 1), and the time (t) is 10 years.
Substituting these values into the formula:
A = 500(1 + 0.05/1)^(1*10)
A = 500(1 + 0.05)^10
A = 500(1.05)^10
A ≈ 500(1.62889)
A ≈ $814.44
Therefore, at the end of 10 years, there will be approximately $814.44 in the savings account.