How much will you have in the account in 10 years?

Question

You deposit $200 in an account earning 5% interest compounded annually. How much will you have in the account in 10 years?

Answer 1

Compound interest is found by   A = P(1+r/n)^nt

A = future or final amount

P = principal = $200

r = interest rate as a decimal = .05

n = number of times compounded annually = 1

t = time in years = 10

 

A = 200(1+.05/1)¹⁽¹⁰⁾ = 200(1.05)¹⁰= $325.78