If I invest $10,000 at 5% compounded yearly, how much will I have in 8 years? Choose the closest answer. Question 28Select one:a.$5,000b.$10,000c.$15,000d.$20,000e.$25, 000
Question
If I invest 5,000b.15,000d.25, 000
Solution
To solve this problem, we can use the formula for compound interest, which is:
A = P (1 + r/n) ^ nt
Where: A = the amount of money accumulated after n years, including interest. P = the principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years
In this case, P = $10,000, r = 5% or 0.05 (in decimal), n = 1 (since it's compounded yearly), and t = 8 years.
Substituting these values into the formula, we get:
A = 10,000 (1 + 0.05) ^ 8 A = 10,000 * 1.4774556
So, the amount of money you will have in 8 years is approximately $14,774.56.
The closest answer among the options given is c. $15,000.
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