Problem

Investments increase exponentially by about $26 \%$ every 3 years. If you made a $\$ 2000$ investment, how much money would you have after 45 years? Future Amount $=[?](1+[])$ Future Amount $=\mathrm{I}(1+r)^{\mathrm{t}}$

Solution

Step 1 :Calculate the number of time periods (3-year intervals) in 45 years: \(\frac{45}{3} = 15\) time periods

Step 2 :Use the compound interest formula: Future Amount = Initial Investment * \((1 + Interest Rate)^{Time Periods}\)

Step 3 :Plug in the values: Future Amount = \(2000 * (1 + 0.26)^{15}\)

Step 4 :Calculate the future amount: Future Amount = \(2000 * (1.26)^{15}\) = 64060.182624413

Step 5 :\(\boxed{After 45 years, the investment would be worth approximately $64,060.18}\)

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Source: https://solvelyapp.com/problems/15173/

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