Question

An account is open with initial deposit of $5500 and earn 2.5% interest compounded annually. What will the account be worth in 10 years

Answer 1

FV= $7,040.46

Explanation:

Giving the following information:

Initial investment (PV)= $5,500

Number of periods (n)= 10 years

Interest rate (i)= 2.5%

To calculate the future value (FV), we need to use the following formula:

FV= PV*(1 + i)^n

FV= 5,500*(1.025^10)

FV= $7,040.46