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26 March, 16:00

A young man is the beneficiary of a huge trust fund 35 years ago. If they had set aside $25,000, how much will be in the trust now if they could invest the money at 2.5% per year compounded annually?

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  1. 26 March, 16:48
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    The correct answer is $59.330.13.

    Explanation:

    According to the scenario the given data are as follows:

    Amount (p) = $25,000

    Interest rate (r) = 2.5%

    Time (T) = 35 years

    So, we can calculate the amount they could invest by using following formula:

    CI = P (1 + R) ^t

    = $25,000 (1 + 0.025) ^35

    = $25,000 (2.37320518607)

    = $59,330.13

    Hence, the amount they could invest is $59,330.13.
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