Question

In 1626, Peter Minuit persuaded the Wappinger Indians to sell him Manhattan Island for $24. If the

Native Americans had put the $24 into a bank account paying 5% interest, how much would the
investment have been worth in the year 2005 if interest were compounded

Answer 1

A = $24*(1+0.05)^379. This assumes annual compounding and 379 years from 1626 to 2005.