Question

Some investments in the stock market have earned 10% annually. The total value of the

investment, A. at this rate can be found using A = P(1.10)^n. where P is the initial value of the

investment, and n is the number of years the money is invested. If $1.000 is invested in the

stock market at this annual rate of return, what is the expected total value after 18 years?

$4,054.47

$5,559.92

$18,700.00

$19,800.00

Answer 1

$5,559.92

Explanation:

Answer 2

$5,559.92.

Explanation:

NB: Please note that the $1.000 is not correct. If we use it the none of the option will not be correct which means that the value was a mistake. Obviously, It should have been a ''comma'' instead of a ''full stop''. So, it should be ''...$1,000 is invested...'' and not ''...$1.000 is invested...''

So, without mincing words let us dive right into the solution of this particular problem/question.

We have that the '' total value of the investment, A. at this rate can be found using A = P(1.10)^n. where P is the initial value of the investment, and n is the number of years the money is invested.''

Using the rate given to us, The expected total value after 18 years =A = P(1.10)^n = $1,000 × (1.10)^18 = $5,559.92.