contestada

If
you
invest $100 in an index fund that earns an average annual rate of
return of 12.3% compounded monthly. You make a regular monthly
contributions of $25, how much will your investment be worth in 52 years?

Respuesta :

Answer Interest rate = 12.3%

The compound interest formula is given by:

Where

A = Future amount

P = Present amount (Principal amount)

r = Interest rate in decimal form

n = No. of times compounded per year

t = time in years.

We can say that if:

Present amount = P

Future amount = 3P

r = 12.3/100 = 0.123

n = 1

t = ?

Substitute the values in the formula of compound interest:

Taking log on both sides.

Round off to nearest option

t ≅ 9 years

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