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Al Safe deposited $15,000 at Q Bank at an interest rate of 16%, compounded quarterly. What was the effective rate (APY

User Benwong
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1 Answer

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Final answer:

To have $10,000 in ten years in a bank account with 10% interest compounded annually, you need to deposit $3,855.43 today.

Step-by-step explanation:

To calculate how much money you need to deposit today to have $10,000 in ten years at an interest rate of 10% compounded annually, you can use the formula for the compound interest present value:

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

Where:

Plugging the numbers in:

P = 10,000 / (1 + 0.10/1)^(1*10)

P = 10,000 / (1.10)^10

P = 10,000 / 2.5937424601

P = 3,855.43

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

User Nir Duan
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