Theodore invests 4240 dollars on a yearly basis at an effective rate of interest of 5 percent. He makes the first deposit on June 1, 1973, and the final deposit on June 1, 1995. How much is the investment worth on June 1, 2009 ?
Answers
Given : Theodore invests 4240 dollars on a yearly basis at an effective rate of interest of 5 percent. He makes the first deposit on June 1, 1973, and the final deposit on June 1, 1995.
To Find : How much is the investment worth on June 1, 2009
Solution:
Interest earned for investment of june 1 , 1973 is for 36 years
Interest earned for investment of june 1 , 1995 is for 24 years
investment made = 13 x 4240 = 55120
Interest earned SI = P * R * T/100
= (4240 * 5 /100) ( 36 + 35 + _______ + 24)
= 212 x (13/2)(60)
= 212 x 390
= 82680
investment worth on June 1, 2009 = 55120 + 82680
= 137800
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