Question

Ten years ago, Emma purchased an investment for $22,500. The investment earned 7 percent interest each year. What is the value of the investment today?

Answer 1

$44,325.

Step-by-step explanation:

In this question we use the future value formula which is shown below:

Future value = Present value × (1 + interest rate)^number of years

= $22,500 × (1 + 0.07)^10

= $22,500 × 1.97

= $44,325

We simply applied the future value by considering the present value, interest rate and the number of years