Question

How much would $100, growing at 5% per year, be worth after 75 years? a. $4,077.43 b. $4,281.30 c. $3,883.27 d. $3,689.11 e. $4,495.37

Answer 1

The answer is c. $3,883.27

Step-by-step explanation:

For the problem, we will be using the formula for calculating the Future Value of money, which is:

`F= P(1+r)^(n)`

Where:

F - future value

P - Principal amount = ($100)

r - rate of growth in percent = (5% or 0.05)

n - number of years = (75)

We calculate thus:

`F = 100(1 + 0.05)^(75)`

`F` =
`100(1.05)^(75)`

`F = 100 X 38.8327`

`F = 3,883.27`

therefore the amount after 75 years will be $3,883.27