Use the formula A=p(1+r)n (is the exponent) to find out how much 500 would be worth in 20 years if</h1>Use the formula A=p(1+r)n (is the exponent) to find out how much500 would be worth in 20 years if

Use the formula A=p(1+r)n (is the exponent) to find out how much $500 would be worth in 20 years if

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Use the formula A=p(1+r)n (is the exponent) to find out how much $500 would be worth in 20 years if it increases by 8% each year.
noner
24 August 2012
A= the amount you’ll have after 20 years p=$500 (the amount of money you invest) 8% is the interest rate so we set r=0.08 n = 20 the number of years we keep the money invested The formula given above is “A=p(1+r)n” but it should actually be A=p(1+r)^n i.e. p multiplied by (1+r) to the power n So: 1+r = 1 + 0.08 = 1.08 (1+r)^n=(1.08)^20 = 1.08x1.08x1.08x….(1.08 multiplied by itself 20 times) = 4.66 So A= p(1+r)^n =500x4.66=2330 After 20 years your 500 dollar investment will have increased to $2330. Hope that helps :-)
mike_jory
25 August 2012
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