Problema Solution
what is the future value of 500$ per year for 10 years compounded annually at 5%.
Answer provided by our tutors
let
P = $500 is the principal
t = 10 years the number of years
m = 1 the number of compounding periods per year
n = m*t = 10*1 = 10 the number of compounding periods
r= 0.05 the annual interest rate as a decimal
A = the future value
A = P(1 + r)^n
A = 500(1 + 0.05)^10
by solving we find:
A = $814.45
click here to see the step by step solution of the equation:
after 10 years the future value will be $814.45.