Question

Rohan invested in a precious mineral. The value of the mineral tends to increase by about 9% per year. He invests $12,000 in 2018.

How much more will his investment be worth by 2025?



Enter your answer in the box.

Round to the nearest whole dollar.

Answer 1

$9,936.47

Explanation:

Similarly to the other problem I helped you with we have:

`A_(final)=A_(initial)(1+r)^t`

Where A is amount, r is rate and t is time.

In this case A=12000, r=9%=0.09 and 9% in decimals is 0.09 (9÷100=0.09), and t=7 since 2025 -2018 = 7 years. So how much is this investment worth in 7 years? Let's plug those values in and we obtain:

`A_(final)=12000(1+0.09)^7=12000(1.09)^7=21936.47`

So the investment will be worth $21,936.47. Now we must calculate how much more will this precious mineral be worth so we get the difference of the final amount and the initial amount the mineral was worth and so:

`A_(final)-A_(initial)=21936.47-12000=9936.47`

And so the mineral will be worth $9,936.47 more than it originally was worth after 7 years.