You plan to invest $350 in a growth fund that has a rate of 1.5% compounded quarterly.
How much money will this investment be worth after 50 years?
Round your answer to the nearest cent, and enter it with a dollar sign, like this: $42.53
To find out how much money the investment will be worth after 50 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount ($350 in this case)
r = the annual interest rate (1.5% or 0.015 as a decimal)
n = the number of times interest is compounded per year (quarterly, so 4 times)
t = the number of years (50 in this case)
Plugging in these values, we get:
A = 350(1 + 0.015/4)^(4*50)
Calculating inside the parentheses:
A = 350(1 + 0.00375)^(200)
A = 350(1.00375)^(200)
Using a calculator, we find:
A ≈ 350 * 5.1642
A ≈ $1,805.47
Therefore, the investment will be worth approximately $1,805.47 after 50 years.
To calculate the future value of an investment with compound interest, we can use the formula:
A = P * (1 + r/n)^(n*t)
Where:
A = the future value of the investment
P = the principal amount invested
r = the annual interest rate (as a decimal)
n = the number of compounding periods per year
t = the number of years
In this case, you're planning to invest $350 at an annual interest rate of 1.5%, compounded quarterly. So, let's plug in the values:
P = $350
r = 1.5% = 0.015 (as a decimal)
n = 4 (quarterly compounding)
t = 50 years
Using these values, we can calculate the future value of the investment:
A = 350 * (1 + 0.015/4)^(4 * 50)
To solve this, you can use a calculator or a spreadsheet. After performing the calculation, I've obtained the value:
A ≈ $1,255.11
Therefore, after 50 years, your investment of $350 in the growth fund will be worth approximately $1,255.11.
50 * 4 = 200, rate compounded quarterly
P (1 + r / 100)^n
350 * (1 + 1.5 / 100)^200
350 * (1 + 0.015)^200
350 * (1.015)^200
350 * 19.643
$6875.06