SOLUTION: If $15500 is invested at a rate of 4.5% per year compounded yearly, find value of the investment at each give time and round to the nearest cent. Use either A=P(1+r/n)^nt or A=Pe^r

Question 1088198: If $15500 is invested at a rate of 4.5% per year compounded yearly, find value of the investment at each give time and round to the nearest cent. Use either A=P(1+r/n)^nt or A=Pe^rt. (a) after 5 months A=$____. (b)after 48 years, A=$____. (c) after 91 years, A=$____.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
after 5/12 of a year, which is 5 months,
15500*e^((5/12)(9/200))=$15793.37
after 48 years, 15500*(e^(48*0.045))=$134402.63.
after 91 years, 15500*e^(.045*91)=$930609.76
Rule of 72 would predict doubling about every 16 years.
Therefore, 48 years would be doubling 3 times or 8 fold increase or $124,000. This is in the right range.
91 years would be an increase of almost 64 fold or a little under $1 million. This is also in the right range.
(the rule of 72 is more exact at 70 and very exact at 69.3)

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