Question

which of the following best describes the amount of money youll have if you put 1000 into q savings account earning 1% annual compound interest for 10 years? you can ignore the impact of inflation in this question

Answer 1

1105

Step-by-step explanation:

The formula for calculating compound interest is expressed as

A = P(1 + r/n)^nt

Where

A is the final amount after t years

P is the initial amount

r is the interest rate

n is the number of compounding periods in a year

t is the number of years

From the information given,

P = 1000

r = 1% = 1/100 = 0.01

t = 10

n = 1 because it is compounded once in a year

By substituting these values into the formula,

A = 1000(1 + 0.01/1)^1 * 10

A = 1000(1.01)^10

A = 1105

The amount of money in the account would be 1105