Final answer:
The investment will be worth approximately $17,697.21 in actual dollars and $16,854.77 in real dollars after 6 years.
Step-by-step explanation:
To calculate how much the investment will be worth after 6 years in actual dollars and in real dollars, we need to use the compound interest formula.
The formula for compound interest is:
A = P(1 + r/n)^(nt)
Where: A is the final amount, P is the principal amount (initial investment), r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.
In this case, Jane Smart has invested $10,000 at an annual interest rate of 11% over 6 years. Let's assume that the interest is compounded annually.
Actual dollars:
A = 10000(1 + 0.11/1)^(1*6)
A = 10000(1.11)^6
A ≅ $17,697.21 (rounded to the nearest cent)
Real dollars:
To calculate the investment's worth in real dollars, we need to adjust for inflation. Assuming an average inflation rate of 5% per year, we can use the formula:
Real A = A / (1 + inflation rate)
Real A = $17,697.21 / (1 + 0.05)
Real A ≅ $16,854.77 (rounded to the nearest cent)