Question

V. direction: do what is asked. then,solve the riddle by matching the letters to blank lines below. A. mrs. nacy intvests P 10,000 in her savings account.she earns an interest of 3% (or P 300.00) everv month. after vear. she earns P

Answer 1

To have $10,000 in ten years in a bank account that pays 10% interest compounded annually, you would need to deposit approximately $3,855.43.

Step-by-step explanation:

The question pertains to the concept of compound interest, which is a fundamental topic in finance and mathematics. To determine how much money needs to be deposited in a bank account to reach a certain future value with a specified interest rate and compounding frequency, we use the formula for compound interest.

In this case, we want to find the principal amount that would grow to $10,000 in 10 years at a 10% annual interest rate.

The formula for compound interest is:

P = A / (1 + r)n

Where:

• P is the principal amount (the initial amount of money)
• A is the future value of the investment/loan, including interest
• r is the annual interest rate (decimal)
• n is the number of years the money is invested or borrowed for

Given that the future value A is $10,000, the annual interest rate r is 10% (or 0.10 as a decimal), and the number of years n is 10, we can rearrange the formula to solve for P:

P = $10,000 / (1 + 0.10)10

Calculating this gives us:

P = $10,000 / (1.10)10

P = $10,000 / 2.59374

P ≈ $3,855.43

Therefore, you would need to deposit approximately $3,855.43 into a bank account that pays 10% interest compounded annually to have $10,000 in ten years.