Question

At age 25, you invest $1,500 that earns 8 percent each year. How much money will you have at age 65? $_____ (no comma) 32586.78 b. At age 40 you invest $1,500 that earns 11 percent per year. How much money will you have at age 65? $______ (no comma) 20378.20 In which case (a or b) would you have more money at age 65? Why?

Answer 1

Answer:

The Money Invested At age 25 earns more because it earns more Interest As compare to The Money Invested At age 40.

Step-by-step explanation:

According To the Question,

• Given, A Person Invested $1,500 at Age of 25, With an 8% Per Annum Interest Rate.

Thus, The Money He will have at age of 65 would be, $1,500 * (1.08)^{40}$ = 32586.78$ . Here The Interest Earn in 40 Year Is 31086.78$.

• And, the Same Person Invested $1,500 at Age of 40, With an 11% Per Annum Interest rate.

Thus, The Money He will have at age of 65 would be, $1,500 * (1.11)^{25}$ = $20378.20 . Here The Interest Earn in 25 Years Is 18878.20$.

⇒ Now, it is understood that the same amount invested for different periods of time & with a different interest rate, Since The Amount who get more Interest Would earn More. hence, The Money Invested At age 25 earns more because it earns more Interest As compare to The Money Invested At age 40.