If you inherited $ 45,000 today and invested all of it in a security that paid a 7 percent rate of return, how much would you have in 25 years?
If it's simple interest >>
I = PRT
I = 45,000 * 0.07 * 25
Add the interest to the total invested.
To calculate how much you would have after 25 years, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial investment), which is $45,000 in this case
r = the annual interest rate (in decimal form), which is 0.07 (7% expressed as a decimal)
n = the number of times the interest is compounded per year (assuming annual compounding, so n = 1)
t = the number of years the money is invested for, which is 25
Using this formula, we can calculate the future value:
A = 45,000(1 + 0.07/1)^(1*25)
A = 45,000(1.07)^25
Now, let's calculate it step by step:
First, calculate (1.07)^25:
(1.07)^25 ≈ 2.756921
Next, multiply the result by the principal amount:
45,000 * 2.756921 ≈ $123,960.45
Therefore, if you invest $45,000 in a security that pays a 7 percent rate of return, you would have approximately $123,960.45 after 25 years.