Question

Jason Allen is planning to invest $26,000 today in a mutual fund that will provide a return of 11 percent each year. What will be the value of the investment in 10 years?

Answer 1

Answer:

Value of investment after 10 years will be $738244

Explanation:

We have given that Jason Allen is planning to invest $26000 today in mutual fund

So present value P = $26000

Rate of interest r = 11 %

Time period n = 10 years

We have to find the amount after 10 years

We know that amount is given by

$A=P(1+\frac{r}{100})^n$, here A is future value , P is present value r is rate of interest and n is time period

So amount after 10 year will be $A=26000\times (1+\frac{11}{100})^{10}$

=$26000\times 1.11^{10}$

$=260000\times 2.8394=738244$

So value of investment after 10 years will be $738244