Assume an investment of $100 earns an APR (Annual Percentage Rate) of 5% compounded annually.
The balance after 190 years will be $______.
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To calculate the balance after 190 years with an APR of 5% compounded annually, we can use the formula for compound interest:
A = P(1+r/n)^(nt)
Where:
A = the future value of the investment
P = the initial amount (principal) of the investment
r = the annual interest rate (expressed as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, let's plug in the values:
P = $100
r = 5% = 0.05 (since it's given as a percentage, we divide by 100)
n = 1 (compounded annually)
t = 190 years
A = 100(1+0.05/1)^(1*190)
A = 100(1+0.05)^190
To calculate this, we can use a calculator or a spreadsheet software:
A = 100(1.05)^190
Calculating this, we find that the balance after 190 years would be approximately $3,513.44.