An investment of $1,000 at a rate of r percent compounded annually was worth $1,500 after 4 years. At the same rate what would be the value of the investment after another 8 years?
(a) $2,500
(b) $2,875
(c) $3,025
(d) $3,150
(e) $3,375
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sureshbala
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Given that 1000 becomes 1500 after 4 yrs i.e. it becomes 1.5 times every 4 years.
Hence in the next 4 yrs 1500 becomes 1.5 x 1500 = 2250
For the next 4 yrs 2250 becomes 1.5 x 2250 = 3375.
Hence in the next 4 yrs 1500 becomes 1.5 x 1500 = 2250
For the next 4 yrs 2250 becomes 1.5 x 2250 = 3375.
