Question

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

Answer 1

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

Answer 2

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