Question

A stock has compound interest and has been increasing by 12% each year for the last few years. If the stock was worth $75 in 2012 and that pattern continues, what will its value be in 2020?

Answer 1

A = P (1 + R*T) --> A: what we want to find, P: what we have for our amount of money at the start, R: rate, as in % increase, T: time, as in 2020-2012 = 8.

A = 75 (1 + 0.12*8) --> A = $147