An advertisement for a mutual fund claims that people who invested in the fund 5 years ago have doubled their money. If the fund's future performance is similar to its past performance, how much would a $2000 investment be worth in 40 years?
2006-12-30 08:19:16 · 5 answers · asked by Lawanna D 1 in Science & Mathematics ➔ Mathematics
If the investment doubles every 5 years, an initial investment of $2000 would be $4000 in 5 years, $8000 in 10 years, $16,000 in 15 years... etc.
In 40 years it would have doubled 8 times (at 5, 10, 15, 20, 25, 30,35, 40), so would be worth 2^8 times $2000, or
256*2000 or 512,000
2006-12-30 08:21:46 · answer #1 · answered by firefly 6 · 1⤊ 1⤋
doubles every 5 years. in 40 years, 40=8*5 so it would increase by a factor of 2^8=256
$2000*256=$512,000
2006-12-30 16:22:06 · answer #2 · answered by yupchagee 7 · 1⤊ 1⤋
Wow, this seems unlikely to happen be that the stocks change so much and I hardly know of anyones stock doubling in five years with a mutal fund.. Must be dirty money, but if the stocks are similar to the future and $2,000.00 is invested then in fourty years it should be $512,000.00.
2006-12-30 16:28:23 · answer #3 · answered by theLimeLight 2 · 0⤊ 0⤋
Today : S is the sum, Time is T
Five year back: S/2 is the sum, Time is T-5
Today : $ 2000
Value in 2 years time: $ 4000
in 4 Years time : $ 8000
in 8 Years time: $ 16000
in 16 years time : $ 32000
in 32 Years of time : $ 64000
in 40 Years of time: $ 64000 x 40/32 = $ 80000
2006-12-30 16:26:21 · answer #4 · answered by yashtapmi 2 · 0⤊ 1⤋
$2000 times 256 (that's 2^8)
$512,000
2006-12-30 16:22:59 · answer #5 · answered by Thomas K 6 · 0⤊ 1⤋