Invests K8000 for 5 years at 10%p.a. compound interest. Calculate the investment value at the end of 5 years?
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May 28
To calculate the investment value at the end of 5 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where: A = the future value of the investment P = the principal amount (K8000) r = the annual interest rate (10% or 0.10) n = the number of times the interest is compounded per year (assuming it is compounded annually, n = 1) t = the number of years the money is invested for (5 years)
Plugging in the values:
A = K8000(1 + 0.10/1)^(1*5) A = K8000(1 + 0.10)^5 A = K8000(1.10)^5 A = K8000(1.61051) A = K12884.08
Therefore, the investment value at the end of 5 years would be K12884.08.