Question

On your tenth birthday, you received $1,000 which you invested at 6.5% interest, compounded annually. Your investment is now worth $5,476. How old are you today

Answer 1

Answer:

Age= 37 years

Explanation:

Giving the following information:

Present value= $1,000

Future value= $5,476

Interest rate= 6.5%

First, we need to calculate the number of years passed using the following formula:

n= ln(FV/PV) / ln(1+i)

n= ln(5,476/1,000) / ln(1.065)

n= 27 years

Age= 10 + 27 = 37 years