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Pat invested x dollars in a fund that paid 8 percent annual [#permalink]
09 May 2006, 00:15
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Pat invested x dollars in a fund that paid 8 percent annual interest, compounded annually. Which of the following represents the value, in dollars, of Pat's investment plus interest at the end of 5 years&
D. (1.08)^5 *(x)
Does anybody have a quick solution to this Q? Thank you.
Let the amount invested is S. 8% annual interest compounded anualy means that in 1 year S will increase with 8% or 1,08*S. In the second year you will have 1,08*S+ 1,08*S*0,08=1,08*S*(1+0,08)=1.08^2*S, then in five years it would be in 5 th power respectively, or D)