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An antique index started at 100 and returned 16.67% per year over the next 20 years. What is the ending value of the index?

An antique index started at 100 and returned 16.67% per year over the next 20 years. What is the ending value of the index?

Solutions

Expert Solution

Here we will use the following formula:

FV = PV * (1 + r%)n

where, FV = Future value, PV = Present value = $100, r = rate of interest = 16.67%, n= time period = 20

now, putting theses values in the above equation, we get,

FV = $100 * (1 + 16.67%)20

FV = $100 * (1 + 0.1667)20

FV = $100 * (1.1667)20

FV = $100 * 21.8365466282

FV = $2183.65

So, ending value of the index is $2183.65.

jeff jeffy answered 2 years ago
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