Chapter 11.5, Problem 11P

To determine

To calculate:

Value of investment after $10$ years.

Answer to Problem 11P

Value of investment after $10$ years is $1000.54$ .

Explanation of Solution

Given information:

Ortegas invest: $\$1000$

Cost raises: $6\%$

Formula used:

  $a_n=a_1+d\left(n-1\right)$

Where,

  $a_1=$ = First term of arithmetic sequence

  $d=$ Common difference of the arithmetic sequence.

  $n=$ Indicated term

Calculation:

First, identify the first term of the arithmetic sequence such as the initial salary,

  $a_1=\$1000$

Then consider the common difference of the arithmetic sequence,

  $d=6\%=0.06$

Now, identify the indicated term of the sequence,

  $n=10years$

So, by using all of this the given equation is

  $\begin{array}{l}{a}_{10}=1000+0.06\left(10-1\right)\\ a_{10}=1000.54\end{array}$

Therefore, Value of investment after $10$ years is $1000.54$ .