Question

Hank put $10,000 in an account for 10 years. The account earned 2.5% interest. How much interest had been earned by the end of the 10 years?

Answer 1

A = P ( 1+ i )^n

A = 10,000(1+0.025)^10

= 10,000(1.025)^10

= $12,800.84

Explanation:

A = future amount

i = interest rate

n = number of years

P = Present value

i.e i = 2.5% , P = $10,000 and n = 10 years