The amount that Peterson will have after 10 years is $5,968.29.
The future value of Petersoon's investment can be computed using the future value formula below:
FV = PV(1+r)^{n}
FV = future value
PV = present value
r = annual interest rate
{n} = number of periods interest held
The future value can also be determined using an online finance calculator as follows:
Savings per week = $10
Deposit per month = $40 ($10 x 4)
Interest rate = 4.25% compounded monthly
Period of investment = 10 years
N (# of periods) = 120 (12 x 10 years)
I/Y (Interest per year) = 4.25%
PV (Present Value) = $0
PMT (Monthly Deposit) = $40
Results:
Future Value (FV) = $5,968.29
Sum of all periodic payments = $4,800.00
Total Interest = $1,168.29
Thus, the amount that Peterson will have after 10 years is $5,968.29.
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