Question

If you deposit $5,000 4 years from today, how much can you withdraw 10 years from today if interest is 7 percent per year compounded annually?

Answer 1

$12,892.67

Step-by-step explanation:

Given:

Deposit amount (P) = $5,000

Interest Rate(I) = 7% (compounded annually) = 7/100 = 0.07

Number of years (n) = 10+4 = 14 years

Amount (A)=?

Calculation:

`A = P (1 + I)^n\\ = 5,000 (1+0.07)^(14)\\ = 5,000(1.07)^(14)\\=5,000(2.57853415)\\=12,892.6708`

Amount = $12,892.67

So, we get $12,892.67 , 10 years from today.