Homework Answers
Amount Invested = $10,000
Tenure of Investment = 5 Year
Return on Investment = 8% per year
Formula:
A = P (1+ r/n) ^nt
Where,
A = Principal + Interest
P = Principal Amount
r = rate of return
n = no of time interest to be applied
t = no of total year
Therefore,
A= $10,000 (1 + 8/100)⁵
= $10,000 (1.08)⁵
= $14, 693.28
Thus, if we invest $10,000 at an interest rate of 8% per year for 5 years, we will.have an amount equals to $14,693.28 at the end of 5th year. Hence, option (b) $14,693.28 is the correct answer.
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