Question - Calculating Investment Growth Over Time
Solution:
The question states that the investment doubles every 13 years. To find out how much it will be worth after 27 years, we need to calculate how many times it will have doubled in that period.First, we divide 27 (the total number of years) by 13 (the number of years it takes to double) to find out how many doubling periods there are in 27 years:27 years / 13 years/doubling period = 2.076923 doubling periodsSince we are looking to calculate the amount to the nearest dollar, we only need whole doubling periods. So, the money will double twice in 27 years, because partial doubling periods are not complete and the question does not give us a growth rate to calculate partial periods.Starting with $220, after the first doubling period (13 years), the money will double to:$220 x 2 = $440After the second doubling period (another 13 years, for a total of 26 years), the money will double again:$440 x 2 = $880The investment will have doubled twice in 26 years, resulting in $880. Since 27 years includes an incomplete doubling period, and we have no rate to calculate partial growth, we stick with the amount after two full periods: $880.So, after 27 years, the person would have $880 in the account to the nearest dollar.
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