Question

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

Answer 1

Annual interest rates can be determined by the following formula:


`A = P(1+r)^(y)`

A represents the total amount after y years. P represents the initial amount invested. r represents the interest rate percentage translated into a decimal. y represents the total amount of years that will have passed.

Plug in your values.


`A = 250(1+.103)^(40)`


`A = 12617.127`

Rounded to the nearest penny, the total amount raised after 40 years is $12617.13.