104k views
5 votes
Suppose your parents decide to invest $5,000 in gold. Their financial advisor anticipates that the value of gold will increase 17% every year for the next 15 years. How much would their investment be worth after 15 years?

User Neal Fultz
by
8.2k points

1 Answer

6 votes

Final answer:

To calculate the value of the investment after 15 years with an annual interest rate of 17%, we can use the formula for compound interest. By plugging in the given values, the investment would be worth approximately $27,624.27 after 15 years.

Step-by-step explanation:

To calculate the value of the investment after 15 years, we can use the formula for compound interest:

A = P(1+r/n)^(nt)

Where:
- A is the final amount
- P is the initial investment
- r is the annual interest rate (in decimal form)
- n is the number of times the interest is compounded per year
- t is the number of years

In this case, we have:
- P = $5,000
- r = 0.17 (17%)
- n = 1 (compounded annually)
- t = 15

Plugging in these values, we get:

A = $5,000(1+0.17/1)^(1*15)

A = $5,000(1.17)^15

A ≈ $27,624.27

Therefore, their investment would be worth approximately $27,624.27 after 15 years.

User Melix
by
8.2k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories