Posted by Scott on Wednesday, December 19, 2012 at 3:46pm.
Scott, you are not giving us anything like the information required for this problem or the other one.
Compound interest?
How often? (monthly, continuous, quarterly)
How long?
In your earlier problem you gave us no idea what the interest rate was or how often it was compounded. Are you making these problems up yourself?
It is not a school question. It is a real life question.
So let's assume the interest averaged 4 % compounded daily over the 27 years.
future value = present value e^yr
where y = 27 years
r = .04 yearly interest rate
e^1.08 = 2.945
so
2700 * 2.945 = 7950.63
calculator here:
http://www.moneychimp.com/articles/finworks/continuous_compounding.htm
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