This graph shows the exponential rise in balance on an initial investment of $1,500 over 25 years at 5% APR. After 10 years about how much interest has the investment earned? Round to the nearest thousand dollars.

Question

anonymous · Answer

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anonymous · Answer

I used this formula for this question, but it doesnt give me the correct answer. I dont know what I am missing here. Can someone help?  A = p(1+r/n)^nt

anonymous · Answer

maybe at 10 you get $2500 hard to say
but if it is $2500 then the interest would be $1000 since you started with $1500

anonymous · Answer

It does not seem to be an exact value.

wolf1728 · Answer

You have this formula:
A = p(1+r/n)^nt
the part that might be giving you problems is the 'n'.  I'd say the 'n' is used when the formula is calculating monthly investments.
Instead try Amount = princ * (1.05)^10
So after 10 years, this yields $1,500 * 1.6288946268
=$2,443.34
Which works out to the penny.  :-)

anonymous · Answer

Thank you!