The equation to model this scenario is:
A = P(1 + r/n)^(nt)
where:
A = the amount of money in the account after t years
P = the principal amount (initial investment), which is $1,000 in this case
r = the annual interest rate, which is 2.5%
n = the number of times the interest is compounded per year, which is once annually
t = the number of years the money is invested
Substituting the given values into the equation, we get:
A = 1000(1 + 0.025/1)^(1×10)
A = 1000(1.025)^10
A ≈ $1283.64
Therefore, after 10 years, there will be approximately $1,283.64 in the savings account.