Question

If $1000 was invested in government bonds in 1924, how much it will be worth in 1994 given that the bonds averaged 7% return per year?

Answer 1

The total money in 1994 is $113989.392.

Step-by-step explanation:

Present value of invested money (PV) = $1000

Total number of years for which the money is invested (n ) = 70 years

The interest rate (r ) = 7%

Now we have to calculate the total amount after 70 years when the invested money earns 7% interest rate.

The amount after 70 years.

`= PV( 1 + r)^(n) \\= 1000 (1 + 0.07)^(70) \\= 113989.392 \ dollars.`