The investment be worth after 10 years on compounded annually is $5107.
Compound interest is the interest you earn on interest. Compound interest is the interest calculated on the principal and the interest accumulated over the previous period.
For the given situation,
Principal, p = $3800
Rate of interest, r = 3% = 0.03
Annually, n = 1
Time period, t = 10 years
The formula of amount in compound interest is
[tex]A = p(1+\frac{r}{n} )^{nT}[/tex]
On substituting the above values,
⇒ [tex]A = 3800(1+\frac{0.03}{1} )^{1(10)}[/tex]
⇒ [tex]A = 3800(1+0.03 )^{10}[/tex]
⇒ [tex]A = 3800(1.03 )^{10}[/tex]
⇒ [tex]A = 3800(1.3439)[/tex]
⇒ [tex]A=5106.88[/tex] ≈ [tex]5107[/tex]
Hence we can conclude that the investment be worth after 10 years on compounded annually is $5107.
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