Question

Suppose that the value of an investment in the stock market has increased at an average compound rate of about 5% since 1914. It is now 2019. a. If your great grandfather invested $1,000 in 1914, how much would that investment be worth today?

Answer 1

FV= $273381.67

Step-by-step explanation:

Giving the following information we need to find the value of the investment in present day

I=1000

i=0.05

n=115

The general formula to calculate the value of an investment for cases like this is:

FV= I*[(1+i)^n]

FV= 1000*(1,05^115)= $273381.67