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In 1626, peter Minuit purchased manhattan island from the Native Americans for $24 worth of trinkets and beads. Find what the $24 would be worth in the year 2014 if it had been deposited in a bank paying 5% interest compounded quarterly. (Round to the nearest dollar)

Respuesta :

Answer:

$24 would be worth $5666315207

Step-by-step explanation:

Given amount invested(principal)  = $24

rate of interest = 5% = 0.05

Time period = 2014 - 1626= 388

compounded quarterly so n= 4

Apply compound interest formula

[tex]A=P(1+\frac{r}{n})^{t*n}[/tex]

Plug in the values in the formula

[tex]A =24(1+\frac{0.05}{4})^{388*4}[/tex]

[tex]A =24(1+0.0125)^{1552}[/tex]

A = 5666315206.95264

A = $5666315207


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