Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 2 - Section 2.2 - Compound Interest - Exercises - Page 143: 45

Answer

$\$394,019$ million $> \$314,119$ million, therefore they could have bought back Manthattan

Work Step by Step

The future value of the investment can be calculated as: $FV=PV\times (1+r)^{t}$ Here, the present value is the money invested by the Indians: $PV=\$24$ The compound rate is $r=6.3\%$ The number of periods is the years between 1626 ans 2011: $t=2011-1626=385$ Therefore the future value is: $FV=PV\times (1+r)^{t}=24\times 1,063^{385}\approx 394,019$ million $\$394,019$ million $> \$314,119$ million, therefore they could have bought back Manthattan
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