Suppose that Peter Minuit did not become the first New York real estate tycoon but instead had invested his $24 at a 5% interest rate in New Amsterdam Savings Bank. What would have been the balance in his account after 5 years? 50 years?

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Business

Misael Boyle

5 November, 06:38

Suppose that Peter Minuit did not become the first New York real estate tycoon but instead had invested his $24 at a 5% interest rate in New Amsterdam Savings Bank. What would have been the balance in his account after 5 years? 50 years?

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Lamont Manning · Answer 1

If you invest $24 at a 5% rate during five years, you will earn:

$24 x (1 + 5%) ⁵ = $24 x 1.2763 = $30.63

After 50 years, and at the same 5%, you will earn:

$24 x (1 + 5%) ⁵⁰ = $24 x 11.4674 = $275.22

I guess that back then $24 was a lot of money, or at least a considerable amount since that was Manhattan's price (at least its equivalent price in trinkets). Or maybe he was a better negotiator than most modern politicians.