$625.00 investested in retirement fund for 10 years @ 3.84% compounded
625(1+.0384)^10 = 911.02
if compounded annually
Steve, if compounded monthly for 10 yeays how do i calculate it
Just alter the formula -- divide the interest rate so it applies monthly, then multiply the number of compounding periods. Surprised you didn't know that, presumably having studied the material . . .
625(1+.0384/12)^(12*10)
To calculate the future value of an investment with compound interest, you can use the formula:
A = P(1 + r/n)^(nt)
where:
A is the future value of the investment
P is the principal amount (initial investment)
r is the annual interest rate (as a decimal)
n is the number of times interest is compounded per year
t is the number of years
In your case, you have $625.00 initially invested in a retirement fund for 10 years at an annual interest rate of 3.84% compounded. Let's plug in the values into the formula:
P = $625.00
r = 3.84% or 0.0384
n = 1 (the interest is compounded annually)
t = 10 years
A = 625(1 + 0.0384/1)^(1*10)
A = 625(1 + 0.0384)^(10)
A = 625(1.0384)^(10)
A = 625 * 1.432364
A = $895.23
Therefore, after 10 years, your investment of $625.00 at 3.84% compounded annually would grow to approximately $895.23.