Question

determine the amount of an investment if $250 is invested at an interest rate of 10.3% for 40 years. Round to the rearest penny

Answer 1

$1280.

Explanation:

We have been given that an amount of $250 is invested at an interest rate of 10.3% for 40 years.

To find the amount after 40 years, we will use simple interest formula.

`A=P(1+rt)`, where,

A = Amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

t = Time in years.

Let us convert our given interest rate in decimal as:

`10.3\%=(10.3)/(100)=0.103`

Upon substituting our given values in above formula, we will get:

`A=\$250(1+0.103*40)`

`A=\$250(1+4.12)`

`A=\$250(5.12)`

`A=\$1280`

Therefore, there will be $1280 in account after 40 years.

Answer 2

Final answer is $1280.

Explanation:

Given that $250 is invested at an interest rate of 10.3% for 40 years.

Now we need to determine the amount of that investment after 40 years.

It doesn't say anything about compounding period so I will consider that as simple interest.

Hence let's use simple interest formula:

`A=P(1+RT)`

Where amount invested = P = 250

rate of interest = R = 10.3% = 0.103

Time = T = 40 years

Now plug these values into above formula

`A=250(1+0.103*40)=250(1+4.12)=250(5.12)=1280`

Hence final answer is $1280.