Question

The expression 1000(1.1)^t represents the value of a $1000 investment that earns 10% interest per year, compounded annually for t years. What is the value of a $1000 investment at the end of each period?

A. 2 years
B. 3 years
C. 4 years
D. 5 years

Answer 1

The value of a $1000 investment at the end of each period can be found by plugging in the given values for t into the expression 1000(1.1)^t.

Step-by-step explanation:

The expression 1000(1.1)^t represents the value of a $1000 investment that earns 10% interest per year, compounded annually for t years.

To find the value of the $1000 investment at the end of each period, you can plug in the given values for t. For instance, if t = 2 years, the value of the investment would be 1000(1.1)^2 = $1210. Similarly, for t = 3 years, the value would be 1000(1.1)^3 = $1331, and so on.

Therefore, the value of a $1000 investment at the end of each period would be:

1. t = 2 years: $1210
2. t = 3 years: $1331
3. t = 4 years: $1464.10
4. t = 5 years: $1610.51