Question

What would be the future value of a saving account starting 700.00 earning four percent(compound annually) after 10 years?

Answer 1

Let's use the formula for compounding interest.

F = P(1+i)^n

where

P is the present worth

i is the interest

n is the number of years

F is the future worth or future value

Substituting the values,

P = 700; i = 0.04; n = 10

F = 700 (1+0.04)^10

F = 1,036.71

Hence, after 10 years, the future value would be 1,036.71.