Example 3

This is a scrollytelling story containing some math equations written with LaTeX.

Suppose you have some amount of money \(P\), and you’ll invest it for \(n\) years, obtaining an annual return \(r\).

How much money will you have \(n\) years from now?

To find the answer you have to calculate the Future Value given by the following formula:

\(FV\) is the Future Value

\(P\) is the Principal, the amount of money you’ll invest.

\(r\) is the annual interest rate, or rate of return.

\(n\) is the number of years.

What would be the future value of $10,000 invested for 10 years, assuming an annual return of 7%?

Let’s do the math:

The answer is:

\[ FV = P \times (1 + r)^n \]

\[\begin{align*} P &= 10,000 \\ & \\ r &= 0.07 \\ & \\ n &= 10 \end{align*}\]

\[\begin{align*} FV &= 10,000 \times (1 + 0.07)^{10} \\ & \end{align*}\]

\[\begin{align*} FV &= 10,000 \times (1 + 0.07)^{10} \\ &= 19,671.51 \end{align*}\]