A government bond is bought for $5000 on June 1, 2010. The value of the bond increases each year by 3.9% of the previous year's value, and the bond matures on June 1, 2030. Determine the value of the bond at maturity.

I'm confused.

The bond grows for 20 years, so you need to calculate the value after the 20th year. Since it grows by 3.9% per year, multiply each year's value by 1.039 to get the next year's value.

ding ding ding - use the growth factor formula: Tn = a r^(n-1)
a=5000
n=20
r = 1.039

To determine the value of the bond at maturity, we need to calculate the value of the bond year by year until June 1, 2030. Here's how you can calculate it step by step:

1. Start with the initial value of the bond, which is $5000.

2. To calculate the value of the bond in the next year, multiply the previous year's value by 1.039 (3.9% increase). For example, to calculate the value in 2011, multiply $5000 by 1.039:

$5000 * 1.039 = $5195

3. Repeat this process for each subsequent year until June 1, 2030. Here's an example of the calculations for a few years:

2012: $5195 * 1.039 = $5403.305
2013: $5403.305 * 1.039 = $5616.499
(continue this process until 2030)

4. Finally, calculate the value of the bond at maturity, which is on June 1, 2030. This will be the final value of the bond calculated using the above process.

Keep in mind that these calculations assume that the value of the bond increases by 3.9% each year and that there are no additional factors or considerations affecting the bond's value.