Aubree’s parents invested $500 into a mutual fund that paid 6.5% interest each year compounded annually when she was born. Find the value of the mutual fund in 18 years.y=𝑦= Answer 1 Question 26 (( Answer 2 Question 26 )x)𝑥What number will you fill in for x𝑥 to solve the equation? Answer 3 Question 26y=$𝑦=$ Answer 4 Question 26
Question
Aubree’s parents invested 𝑦=$ Answer 4 Question 26
Solution
The question is asking for the value of a mutual fund after 18 years, given an initial investment of $500 and an annual interest rate of 6.5% compounded annually.
The formula for compound interest is A = P(1 + r/n)^(nt), where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal form, so 6.5% becomes 0.065).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.
In this case, P = $500, r = 6.5% or 0.065, n = 1 (since the interest is compounded annually), and t = 18 years.
So, the equation becomes A = 500(1 + 0.065/1)^(1*18).
To solve for A (the value of the mutual fund in 18 years), you would fill in 18 for x in the equation.
So, the equation becomes A = 500(1 + 0.065)^18.
Now, you can solve for A to find the value of the mutual fund in 18 years.
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