What is the balance in an account at the end of 10 years if $2,500 is...

Question

Question

What is the balance in an account at the end of 10 years if $2,500 is deposited today and the account earns 4% interest, compounded annually?

Answer 1

Answer #1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

A=$2500*(1.04)^10

=$2500*1.480244285

which is equal to

=$3700.61(Approx).

Answer 2

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