A young man is the beneficiary of a huge trust fund 35 years ago. If they had set aside $25,000, how much will be in the trust now if they could invest the money at 2.5% per year compounded annually?

Question

Business

Bailey Woodward

25 April, 07:53

A young man is the beneficiary of a huge trust fund 35 years ago. If they had set aside $25,000, how much will be in the trust now if they could invest the money at 2.5% per year compounded annually?

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Answers (1)

Know the Answer?

Amir Middleton · Answer 1

The correct answer is $59.330.13.

Explanation:

According to the scenario the given data are as follows:

Amount (p) = $25,000

Interest rate (r) = 2.5%

Time (T) = 35 years

So, we can calculate the amount they could invest by using following formula:

CI = P (1 + R) ^t

= $25,000 (1 + 0.025) ^35

= $25,000 (2.37320518607)

= $59,330.13

Hence, the amount they could invest is $59,330.13.