Question

According to an old myth, Native Americans sold the island of Manhattan about 400 years ago for $24. If they had invested this amount at an interest rate of 7 percent per year, how much, approximately, would they have today

Answer 1

They would have approximately $14 000 000 000 000.

Step-by-step explanation:

From the compound interest formula,

Amount = P
`(1 + (r)/(n)) ^(t)`

Given that: P = $24, R = 7%, t = 400 years,

Amount = 24
`(1 + (7)/(100)) ^(400)`

= 24
`((107)/(100)) ^(400)`

= 1.360574465 ×
`10^(13)`

The amount they would have is approximately $1.4 ×
`10^(13)`

Answer 2

FV= $13,605,744,645,293.70

Step-by-step explanation:

Giving the following information:

Initial investment= $24

Number of years= 400

Interest rate= 7 percent compounded annually

To calculate the value of the investment today, we need to use the following formula:

FV= PV*(1+i)^n

FV= 24*(1.07^400)

FV= $13,605,744,645,293.70