Question

A very rich man invests $120,000 at 4.5% annual interest. How much money will he have made from his investment after 17 years? Round your answer to the nearest hundredth (2 places after the decimal).

Answer 1

Here,

P = 120000

r = 4.5% = 4.5/100 = 0.045

n= 17

Applying the formula to calculate the interest,

`\begin{gathered} A=P(1+rn) \\ \text{ =120,000(1+0.045}*17) \\ \text{ =}211800 \end{gathered}`

The answer is $211800.