Question

Jose Reynolds deposited $10,000 in an account paying interest of 4% compounded annually.

What amount will be in the account at the end of 4 years? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 52.75.)

Amount

$

Answer 1

Answer :

Amount at the end of 4 years compunded annually :

= principal (1+rate/100) ^ (T × n)

{Note : ^ means to the power of }

Therefore,

principal = $10,000

Rate = 4%

Term = 4

n = 1

That implies ,

= $10,000 ( 1 + 4/100)^ 4

= $10,000 (1.04)^4

= $10,000 × 1.169858

= $11,698.58