Final answer:
To calculate how much money Miguel needs to deposit in order to have $10,000 in ten years with a 10% interest rate compounded annually, we can use the formula for compound interest.
Step-by-step explanation:
To calculate how much money Miguel needs to deposit in order to have $10,000 in ten years with a 10% interest rate compounded annually, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
1 A is the future value (in this case $10,000
2 P is the principal amount (the amount Miguel needs to deposit
3 r is the annual interest rate (10% or 0.10)
4 n is the number of times interest is compounded per year (1 for annually compounded interest)
5 t is the number of years (10)
By substituting the values into the formula and solving for P, we can find the amount Miguel needs to deposit.