Some investments in the stock market have earned 10% annually. At this rate, earnings can be found using the formula , where A is the total value of the investment, P is the initial value of the investment, and n is the number of years the money is invested. If $1,500 is invested in the stock market at this annual rate of return, what is the expected total value after 18 years?
A) $29,700.00
B) $28,050.00
C) $8,339.88
D) $7,581.71
To find the expected total value after 18 years, we can use the formula:
A = P(1 + r)^n
Where:
A = Total value of the investment
P = Initial value of the investment ($1,500)
r = Annual rate of return (10% or 0.10)
n = Number of years the money is invested (18)
Plugging in the values, we get:
A = $1,500(1 + 0.10)^18
A = $1,500(1.10)^18
A = $1,500(6.727499105)
A = $10,091.24
Therefore, the expected total value after 18 years would be $10,091.24.
None of the answer choices provided match this value.