Dan has $500. He invests that $500 into the stock market and in Week 1, he collects 10% of what he initially invested, closing the week at $550. Dan takes that $550 and invests it into the stock market on Week 2, collecting another 10%, giving him $605 at the end of Week 2. Dan takes the $605 entering Week 3, collects another 10% and closes Week 3 with a total of $665.50. If this pattern continues, how much would Dan have at the end of the year (52 weeks)?
Dan has $500. He invests that $500 into the stock market and in Week 1, he collects 10% of what he initially invested, closing the week at $550. Dan takes that $550 and invests it into the stock market on Week 2, collecting another 10%, giving him $605 at the end of Week 2. Dan takes the $605 entering Week 3, collects another 10% and closes Week 3 with a total of $665.50. If this pattern continues, how much would Dan have at the end of the year (52 weeks)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Dan has $500. He invests that $500 into the stock market and in Week 1, he collects 10% of what he initially invested, closing the week at $550.
Dan takes that $550 and invests it into the stock market on Week 2, collecting another 10%, giving him $605 at the end of Week 2.
Dan takes the $605 entering Week 3, collects another 10% and closes Week 3 with a total of $665.50.
If this pattern continues, how much would Dan have at the end of the year (52 weeks)?
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The future value is the future worth of the amount that will be paid or received in the future.
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