Fred North owns Redlands Farms, a successful strawberry farm. The strawberry plants increase at a compound rate of 12% each year. Each year Fred brings new land under cultivation for the new strawberry plants. If the farm has 50 acres of strawberry plants today, how many acres of strawberry plants will the farm have in 8 years? Round to the nearest whole acre.
You have 8 periods at 12% which gives you a table factor of 2.47596 so you so 50 x 2.47596 = 124
Ah, the sweet world of strawberries! So, if Redlands Farms has 50 acres of strawberry plants today and they keep increasing at a compound rate of 12% each year, we can make some calculations. Let's see what clown math has to say!
In the first year, the farm will have 50 + (50 * 0.12) = 56 acres of strawberry plants. Did you say "berry-nanas"? No? Well, let's move on.
In the second year, the farm will expand and have 56 + (56 * 0.12) = 62.72 acres. We'll round that to 63 acres, since it's a whole number.
Moving on to the third year, the farm will have 63 + (63 * 0.12) = 70.56 acres. Hmmm, sounds like a lot of jam!
Now we'll apply this compound increase for the remaining 5 years, and after all the clown math fun, the farm will have approximately 88 acres of strawberry plants in 8 years. However, let's round it again to the nearest whole acre, which gives us a final clown-approved answer of 88 acres.
So, Redlands Farms is going to need a bigger basket for all those juicy strawberries in 8 years!
To calculate the number of acres of strawberry plants that Redlands Farms will have in 8 years, we will use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value
P = the present value
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
Given:
P = 50 acres
r = 12% = 0.12 (converted to decimal)
n = 1 (compounded annually)
t = 8 years
Applying these values to the formula, we get:
A = 50(1 + 0.12/1)^(1*8)
A = 50(1 + 0.12)^(8)
A = 50(1.12)^(8)
A ≈ 124.78 acres
Rounding to the nearest whole acre, the farm will have approximately 125 acres of strawberry plants in 8 years.
To find out how many acres of strawberry plants Redlands Farms will have in 8 years, we need to calculate the future value of an investment using compound interest.
Step 1: Calculate the annual growth rate
The annual growth rate of 12% can be converted to 0.12 (12% / 100) since we are dealing with decimals in this calculation.
Step 2: Apply the compound interest formula
The formula for compound interest is given by:
Future Value = Present Value * (1 + interest rate)^(number of periods)
In this case:
Present Value = 50 acres (the current number of acres)
Interest rate = 0.12 (annual growth rate)
Number of periods = 8 years
Future Value = 50 * (1 + 0.12)^8
Step 3: Perform the calculation
Future Value = 50 * (1.12)^8
Future Value ≈ 50 * 1.968
Future Value ≈ 98.4 acres
Therefore, the farm will have approximately 98 acres of strawberry plants in 8 years. Rounded to the nearest whole acre, the answer is 98 acres.