If you invest $10,000 today in a savings account that earns 5% interest, compounded annually, how much would be in the account at the end of ten years?

Question

Quizplus · Accepted Answer

To calculate the future value of the investment, we use the formula: FV = PV (1 + r/n)^(n*t), where PV is the present value (in this case, $10,000), r is the interest rate (5% as a decimal, or 0.05), n is the number of times the interest is compounded annually (1 in this case), and t is the number of years (10 in this case). Plugging in the numbers, we get: 
FV = $10,000 (1 + 0.05/1)^(1*10) 
FV = $10,000 (1.05)^10 
FV = $16,289.47 
Therefore, the correct answer is B.

If You Invest $10,000 Today in a Savings Account That