A person deposited $500 in a savings account that pays 5% annual interest that is compounded yearly. At the end of the 10 years, how much money will be in the savings account?
Multiply $500 by (1.05)^10.
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500*(1.05)^10 =
i have the same question but is thier a way u can put it in a sequence
How did you get 1.05 out of 5%? I thought 5% = 0.05
Damnnn i guess im the first one to say something in 2022 from yall in 2012
To find out how much money 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 is the final amount
P is the initial principal (deposit)
r is the annual interest rate (expressed as a decimal)
n is the number of times the interest is compounded per year
t is the number of years
In this case, the initial 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 we want to calculate the final amount after 10 years (t = 10).
Plugging in these values into the formula, we get:
A = 500 * (1 + 0.05/1)^(1*10)
Now let's calculate step by step:
1. First, divide the annual interest rate by the number of times the interest is compounded per year: 0.05 / 1 = 0.05.
2. Then add 1 to this value: 1 + 0.05 = 1.05.
3. Next, raise this sum to the power of the number of times the interest is compounded multiplied by the number of years: 1.05^(1*10) = 1.05^10.
4. Finally, multiply the initial principal by this result: 500 * 1.05^10.
Using a calculator or spreadsheet, we find that the final amount (A) in the savings account after 10 years will be approximately $814.44.