Question

This graph shows the exponential rise in balance on an initial investment of $1,500 over 25 years at 5% APR. After 10 years about how much interest has the investment earned? Round to the nearest thousand dollars.

Answer 1

After 10 years, Interest = 1500(1 + 0.05)^10 - 1500 = 1500(1.05)^10 - 1500 = 2443.34 - 1500 = $943.34 = $1,000 to the nearest thousand dollars.