Calculate the final value after 10 years if you invest $5000.00 at 2.5% per annum, compounded annually.
50000(1+.025)^10
Thanks but what does dis mean ^ ?
^ means the following number is an exponent.
To calculate the final value after 10 years when investing $5000.00 at 2.5% per annum, compounded annually, you need to use the formula for compound interest:
Future Value = Principal × (1 + Interest Rate)^Time
In this case:
Principal = $5000.00
Interest Rate = 2.5% per annum (or 0.025 as a decimal)
Time = 10 years
Now, let's plug these values into the formula:
Future Value = $5000.00 × (1 + 0.025)^10
To simplify this calculation, let's break it down step by step:
Step 1: Calculate the value inside the brackets.
(1 + 0.025)^10 = 1.025^10 ≈ 1.28008477
Step 2: Multiply the principal by the value inside the brackets.
$5000.00 × 1.28008477 ≈ $6400.42
Therefore, the final value after 10 years, with an initial investment of $5000.00 at an interest rate of 2.5% per annum, compounded annually, is approximately $6400.42.