Question

Three years ago, Jolene bought $775 worth of stock in a software company. Since then the value of her purchase has been increasing at an average rate of 7 1 2 % per year. How much is the stock worth now?

Answer 1

Answer: $962.78

Explanation:

Formula of the accumulated amount :
`A =P(1+r)^t`

P= Principal amount

r = rate of interest ( in decimal)

t= time ( in years )

Given, P = $775

t= 3 years

r
`=7(1)/(2)\%=(15)/(2)\%=7.5\%= 0.075`

Now, the worth of shares after 3 years would be
`A = 775(1+0.075)^3`

`\\\\ = 775(1.075)^3\\\\= 775* 1.242296875\\\\=962.78`

Hence, the worth of the stock = $962.78