Answer:
This is a compound interest problem. We can use the formula:
A=P(1+r/n)nt
where:
A is the future value of the investment
P is the present value of the investment
r is the annual interest rate
n is the number of times the interest is compounded per year
t is the number of years
We are given:
A = 10,000
r = 0.18
n = 1 (assuming annual compounding)
t = 48
We need to find P. Plugging in the values, we get:
10,000=P(1+0.18/1)1×48
Solving for P, we get:
P=(1+0.18)4810,000
Using a calculator, we get:
P≈2.17
So Jimmy needs to start with about $2.17 to have $10,000 in 48 years at 18% interest.
Explanation: