# Math Help - interest

1. ## interest

If money can be invested at 4.5% compounded annually, which is larger: $5,000 now or$8,000 in 10 years?

2. Originally Posted by gracy
If money can be invested at 4.5% compounded annually, which is larger: $5,000 now or$8,000 in 10 years?
$5000 now invested at 4.5% will be worth$5000*(1.045)^10 in 10
years time (that you will have $5000*1.045 after 1 year, ($5000*1.045)*1.045 after 2 years and in general $5000*(1.045)^n after n years).$5000*(1.045)^10=$7764.85<$8000,

so $8000 in 10 years time is worth more than$5000 today invested at
4.5%.

RonL