Answer:
The worth of the investment now is $98,976.71.
Explanation:
Since this is an investment made in the past which we wan to determine its worth now, the relevant formula to use is the formula for calculating the future value (FV) of an investment given as follows:
FV = P * (1 + r)^n ......................................... (1)
Where;
FV = future value or the worth of the investment now = ?
P = Invested amount = $20,000
r = Semiannual interest rate = 6.5% / 2 = 3.25%, or 0.0325
n = number of semi-annuals = 25 years * 2 = 50
Substituting the values into equation (1), we have:
FV = $20,000 * (1 + 0.0325)^100
FV = $20,000 * 4.94883548155771
FV = $98,976.71
Therefore, the worth of the investment now is $98,976.71.
