At the beginning of each year, Joe invests $10,000 in his retirement fund. The fund gives 10% interest, compounded annually. At the end of the third year, how much money will be in Joe's fund? Help, Please?

Question

1313 views around the world

You can reuse this answer
Creative Commons License

Answer 1 · 2018-03-23T19:23:13

#$13,310#

The formula for compound interest is given as:

#FV=PV(1+r/n)^(nt)#

Where:

#FV="future value"#

#PV="principal value"#

#r="interest rate as a decimal"#

#n="compounding period"#

#t="time in years"#

From the information given:

#PV=10000#

#r=10/100=0.1#

#n=1#

#t=3#

Putting these in the formula:

#FV=10000(1+0.1/1)^(3)#

#FV=10000(1.1)^(3)=13310#

#$13,310#