Question

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?

Answer 1

Answer:

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.