Question

Mason invested $6000 in King Steel. His investment earned him an average 1 point

of 7.5% each year. How much will his investment be worth in 5 years?
$6,037.50
$8,250.00
$8,613.78
$98,478.52

Answer 1

$8,613.78

Explanation:

The multiplier each year is 1+7.5% = 1.075, so in 5 years, the investment will have been multiplied by 1.075^5 ≈ 1.435629.

Then the value of Manson's investment will be $6000·1.435629 ≈ $8,613.78