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An investment of 75,000 increases at a rate 12.5% per year. Find the value of the investment after 30 years.

A. $2,568,248
B. $1,438,883
C. $256,825
D. $243,549

Respuesta :

carlosego
For this case we have an equation of the form:
 y = A * (b) ^ t
 Where,
 A: initial amount
 b: growth rate
 t: time
 Substituting values we have:
 y = 75000 * (1.125) ^ t
 For 30 years we have:
 y = 75000 * (1,125) ^ 30
 y = 2568247.871
 Rounding:
 y = 2568248
 Answer:
 the value of the investment after 30 years is:
 A. $ 2,568,248
CastleRook
Given that an investment of 75,000 increases at a rate 12.5% per year. Find the value of the investment after 30 years. 
Solution
The value after 30 years will be given by
A=P(1+r/100)^n
where:
P=principple
r=rate
n=time
from the information:
P=75000, r=12.5%, n=time
thus plugging the values we obtain:
A=75000(1+12.5/100)^30
A=75000(1.125)^30
A=2,568,247.871

Answer: A. $2,568,248

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