Question

some investments in the stock market have earned 12% annually at this rate earnings can be found using the formula a=p(1.12)^n where A is the total value of the investment, P is the initial value of investment and n is the number of years money is invested. if $5000 is invested in the stock market at this annual rate of return, what is the expected total value after 20 years? please show work thank you!!

Answer 1

To determine the expected total value of the investment after 20 years, we simply plug in the given to the prepared equation,
                                     A = P x (1.12^n)
Substituting the known values,
                                     A = ($5000) x (1.12^20)
                                     A = $48,231.47
Thus, the expected amount of your purchase is $48,231.47.