Question

If $1,000.00 is invested today that earns 5% interest, what is the dollar value of the investment in 10 years?

Answer 1

Answer)

Calculation of value of $ 1,000.00 invested @ 5% for 10 years

The value amount of $ 1,000.00 invested today for 10 years can be calculated by using compound interest formula.

Future Value = Amount invested X (1 +Rate of Interest)^Number of years.

                        = $ 1,000 X (1+5%)^10

                         = $ 1,000 X 1.628895

                         = $ 1,628.89

Therefore the value of $ 1,000 invested at 5% rate for 10 years will be $ 1,628.89.

Alternatively, the maturity value may be calculated as follows:

(Amount in $)

Year	A	B = (A x 5%)	C = (A +B)
	Amount in the Beginning of year	Interest @ 5%	Amount at the end of year
1	1,000.00	50.00	1,050.00
2	1,050.00	52.50	1,102.50
3	1,102.50	55.13	1,157.63
4	1,157.63	57.88	1,215.51
5	1,215.51	60.78	1,276.28
6	1,276.28	63.81	1,340.10
7	1,340.10	67.00	1,407.10
8	1,407.10	70.36	1,477.46
9	1,477.46	73.87	1,551.33
10	1,551.33	77.57	1,628.89

Therefore the value of $ 1,000 invested at 5% rate for 10 years will be $ 1,628.89.