you iherited $12,000 from great-uncle michael. If you invest it and average an 8% annual rate of return, compounded anually how much will you have in 20 years

Answer

Compound interest=P (1+I) ^-1

Where P=principal

I=norminal annual interest rate in percentage.

^=Compounding periods.

Therefore,

#12,000 (1 + 0.08) 20

=12,000 (1.08) ^20

=12,000 (4.660_1)

=12,000 (3.666)

=43,920

In twenty years, I will have #43,920 dollars.