Problema Solution
suppose one of your ancestors invested $500 in 1900 in an account paying 4% interest compounded annually. find the account balance in each of the following years.
a.1850
b.1900
c.2000
d.2100
Answer provided by our tutors
You might have an error in your question! You wrote "1900" - but I think you meant 1800, since question a) says 1850!
ASSUMING THAT YOU MEANT 1800 was when the account started,
Just take the number of years since the account was opened as x... then use this formula:
1.04^x($500)
a) 1.04^50 ($500) = $3,553.34
b) 1.04^100 ($500) = $25,252.47
c) 1.04^200 ($500) = $1,288,128.64
d) 1.04^300 ($500) = $64,412,743.02