Question

The relative growth rate for a certain type of mutual fund is 5.1% per year. An account is opened with a balance of $35,000. How much is the mutual fund worth in 5 years? In your final answer, include all of your calculations.

Answer 1

36,785 dollars
_----____---

Answer 2

The mutual fund would be worth $ 44,669.855 ( approx )

Explanation:

∵ Future value of an investment,

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

Where,

P = invested amount,

r = rate per period,

t = number of periods,

Here,

P = $ 35,000

r = 5.1% = 0.05,

t = 5 years,

Hence, the future value would be,

`A=35000(1+0.05)^(5)`

`=35000(1.05)^5`

`=44669.8546875`

`\approx \$ 44669.855`