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?

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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$