Suppose that a person deposits 10.000 dollars in a savings account at a bank yielding % 11 per year

Question

Suppose that a person deposits 10.000 dollars in a savings account at a bank

yielding % 11 per year with interest compounded annually. How much will be

in the account after 10 years, 20 years, 30 years?

Answer 1

For this problem, use the Annual Compound Interest formula.

A = P(1 + r/n)^nt

Here P is the principal amount, P = $10,000, r is the rate in decimals, r = 0.11, n is the number of compounding periods per unit t, t is time, A is the accrued amount.

Now can you calculate it?

Hint: since you are compounding annually, n = 1, and t = 10 (for 10 years), t = 20 (for 20 years), etc.

Let me know if you need further help.

Answer 2

A = p(1 + r)^t

A₁₀ = 10000(1 + 0.11)¹⁰

Substitute 20 and 3 for t for the other two.