Problema Solution
Paul is 20 years old now. He is investing 1500 dollars with an fix interest rate of 5% annually. How much money will he have at 55 years old .
Answer provided by our tutors
P = $1,500
r = 0.05 or 5% annual interest rate
t = 55 - 20 = 35 years
A = future value
Assuming the amount if compounded annually we have:
A = P(1 + r)^t
A = 1500(1 + 0.05)^35
A = $8,274
AT 55 years of age, Paul will have $8,274.