Question

James and Terry buy 100 shares of Verizon Stock. Over the last twenty years the stockhas increased 7% in value each year. Assuming the stock will continue to increase at thesame rate for the next twenty years.They buy $5000 in shares. How much will be in theaccount after 20 years? Use the Formula B= Pe to the rt$20,276.00$202.76O $12,000$2,027,600.0

Answer 1

If we use the formula

$B=Pe^{rt}$

where B is the final amount, P is the initial amount, r is the growth rate, and t is the time interval. In our case we have

P = $5000, r = 0.07 , and t = 20; therefore,

$B=5000\times e^{(0.07\times20)}$$B=20,276.00$

Hence, the amount of money available in the account after 20 years will be $20,276.00 which is the very first choice in our options list.