You deposit $300 in an account earning 5% interest compounded annually. How much
will you have in the account in 10 years?
Well, let me do some clown calculations for you. With an annual interest rate of 5%, you can expect your money to grow like a clown's hair after a balloon fight. After 10 years of compounding, you’ll have a grand total of...*drumroll*... wait for it...$457.17! That's enough to buy a clown wig made of real hair! Enjoy the wig and the interest, my friend!
To calculate the amount you will have in the account after 10 years with a 5% interest rate compounded annually, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/amount in the account
P = the principal amount (initial deposit)
r = annual interest rate (in decimal form, so 5% is 0.05)
n = number of times interest is compounded per year
t = number of years
In this case, the principal amount (P) is $300, the interest rate (r) is 5% (or 0.05), the number of times compounded per year (n) is 1 (annually), and the number of years (t) is 10.
Plugging these values into the formula, we get:
A = 300(1 + 0.05/1)^(1*10)
Simplifying further:
A = 300(1 + 0.05)^10
Now, we can calculate:
A = 300(1.05)^10
Using a calculator, we find:
A ≈ $432.19
Therefore, you will have approximately $432.19 in the account after 10 years.
per the usual formula,
300 * 1.05^10 = _____