You opened a three year savings account with annual interest rate of 10%. Approximately how much will you have in this savings account 3 years from now if you deposit $100 today?

Question

You opened a three year savings account with annual interest rate of 10%. Approximately how much will you have in this savings account 3 years from now if you deposit $100 today?

2 Answers

Answer Question

Answer 1

Since the annual interest rate is 10%, it means whatever amount of money you put into that account, you will get 10% of it more every year.

So for three years, if you put $100 into it, you're getting 10% of $100, which is just $10, for the first year.

$100 + $10 = $110

Second year:

$110 + $11 = $121

Third year:

$121 + $12.10 = $133.10 <--- This is what you will have in three years.

Answer 2

If you opened a three year savings account with annual interest rate of 10% that means that the amount in your account will be increased by 10% ever single year. The example above has made a good demonstration of how, in 3 years time, you will have $133.10 but my advice is, if you are getting that kind of interest rate on your savings account, you should be putting a hell of a lot more money into it than $100. Heck some lenders might even allow you to borrow money at a lower interest rate than so just stick the loan into the account, build up interest, pay back the loan and have some cash left over!!!