ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
Bartleby Related Questions Icon

Related questions

Question
**Title: Long-term Investment Growth Calculation**

---

**Scenario:**

Ami has decided to be cryogenically frozen at the time of her death so that she can be resurrected once medical science has advanced far enough to keep her alive. In preparation, Ami places $173,802 into an investment account which earns an 8.4% rate of return per year. To her amazement, she is one day brought back to life. "How long has it been?" she asks. "296 years," the strangely dressed person replies.

**Problem Statement:**

How much money is sitting in Ami's investment account?

*You are welcome to round to the nearest whole number. You need to be within $1 million of the correct answer.*

*Input box for calculation answer*

---

In order to find out how much money Ami will have after 296 years, we can use the formula for compound interest: 

\[ A = P(1 + \frac{r}{n})^{nt} \]

Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount (the initial money placed into the account), which is $173,802.
- \( r \) is the annual interest rate (decimal), in this case, 8.4% or 0.084.
- \( n \) is the number of times that interest is compounded per year. If it is compounded annually, \( n = 1 \).
- \( t \) is the time the money is invested for in years, which is 296 years.

Given:
- \( P = $173,802 \)
- \( r = 0.084 \)
- \( n = 1 \)
- \( t = 296 \)

Using the formula and plugging in the values:

\[ A = 173,802 \left(1 + \frac{0.084}{1}\right)^{1 \times 296} \]
\[ A = 173,802 \left(1 + 0.084\right)^{296} \]
\[ A = 173,802 \left(1.084\right)^{296} \]

To find the exact amount, you would need to calculate \( 1.084^{296} \).

---

**Submission:**
Enter your calculated answer in the box provided.
expand button
Transcribed Image Text:**Title: Long-term Investment Growth Calculation** --- **Scenario:** Ami has decided to be cryogenically frozen at the time of her death so that she can be resurrected once medical science has advanced far enough to keep her alive. In preparation, Ami places $173,802 into an investment account which earns an 8.4% rate of return per year. To her amazement, she is one day brought back to life. "How long has it been?" she asks. "296 years," the strangely dressed person replies. **Problem Statement:** How much money is sitting in Ami's investment account? *You are welcome to round to the nearest whole number. You need to be within $1 million of the correct answer.* *Input box for calculation answer* --- In order to find out how much money Ami will have after 296 years, we can use the formula for compound interest: \[ A = P(1 + \frac{r}{n})^{nt} \] Where: - \( A \) is the amount of money accumulated after n years, including interest. - \( P \) is the principal amount (the initial money placed into the account), which is $173,802. - \( r \) is the annual interest rate (decimal), in this case, 8.4% or 0.084. - \( n \) is the number of times that interest is compounded per year. If it is compounded annually, \( n = 1 \). - \( t \) is the time the money is invested for in years, which is 296 years. Given: - \( P = $173,802 \) - \( r = 0.084 \) - \( n = 1 \) - \( t = 296 \) Using the formula and plugging in the values: \[ A = 173,802 \left(1 + \frac{0.084}{1}\right)^{1 \times 296} \] \[ A = 173,802 \left(1 + 0.084\right)^{296} \] \[ A = 173,802 \left(1.084\right)^{296} \] To find the exact amount, you would need to calculate \( 1.084^{296} \). --- **Submission:** Enter your calculated answer in the box provided.
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education