Question

Your father invested a lump sum 28 years ago at 4.05 percent annual interest. Today, he gave you the proceeds of that investment, totaling $48,613.24. How much did your father originally invest?A. $14,929.47
B. $16,500.00
C. $16,099.45
D. $15,500.00
E. $15,994.70

Answer 1

Answer:

Initial investment is $16211.42 which is not in the given option

So none of the bellow option is correct

Explanation:

It is given that total amount after 28 years is $48613.24

Rate of interest r = 4.05 %

Time period n = 28 years

We know that future value is give by $A=P(1+\frac{r}{100})^n$, here A is future value , P is present value , r is rate of interest and n is time period

So $48613.24= P(1+\frac{4.05}{100})^{28}$

$48613.24= P\times 1.04^{28}$

$48613.24= P\times2.998$

P = $16211.42

So the initial investment is $16211.42

Which is not in the given option

So none of the above option is correct