Answer:
You would have $1552.9 after 10 years.
Step-by-step explanation:
Compound interest:
The compound interest formula is given by:
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.
You currently have $500 saved up.
This means that [tex]P = 500[/tex]
12% interest, compounded annually.
This means that [tex]r = 0.12, n = 1[/tex].
How much money would you have after 10 years?
This is A(10). So
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]A(10) = 500(1 + \frac{0.12}{1})^{10}[/tex]
[tex]A(10) = 1552.9[/tex]
You would have $1552.9 after 10 years.
