Question

In 1626, the Dutch bought Manhattan Island, now part of New York City, for $24 worth of merchandise.

Suppose that, instead, $24 had been invested in an account that paid 3.6 interest each year. Find the
balance in 2013. Round your answer to the nearest million.

Answer 1

$334.37

Explanation:

First, find out how many years are between 2013 and 1626 by subtracting them.

2013-1626 = 387 years

Next, we use the formula for simple interest.

Answer = Principal*rate *time

or A = p*r*t

The Principal is the initial amount of $, so p = 24

The rate is 3.6%, in decimal form is 0.036, so r = 0.036

Time = 387

So, we plug all that in together to get A = 24*0.036*387

A = 334.368