What is the future value? $5,000 invested for 10 years at 10 percent compounded annually?

Question

 Pls and thank you

Answer 1

F = 5000(1.1¹⁰) ... that's how to compute it. Take it up with your calculator. Do you see why?

Answer 2

You initial investment is S, You invested for 1 year with a rate 10%. After 1 year you will have S1=S+S*10/100=S*(1+0.10)

 

Now you invest S1 again for 1 year. At the end of the (second) year you get

S2=S1+S1*10/100=S1*(1+0.10)=

=S*(1+0.10)*(1+0.10)=S*(1+0.10)^2.

 

and so on

After 10 year, you will have

S10=S*(1+0.10)^10. 

 

In your question S=5,000. So plug in S in the last formula and you get your answer.