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You own 50 shares in a major corporation stock valued at $128 per share. This stock gained 12% in value last year. Assuming the stock will continue to grow at the same rate over the next 5 years, calculate the value of the stock per share in the 5th year.

Respuesta :

Edufirst

Answer:

  • $225.58

Explanation:

The growth of this stock is an example of annual compounded interest: the value will increase at the same rate over the next 5 years, thus every year its value will be multiplied by 1 + 0.12 = 1.12.

Thus, at the end of the year 5, the share will have multiplied its value (1.12)⁵ times:

         [tex]Value=\$128\times 1.12^5\approx\$128\times 1.76234=\$225.58[/tex]

Answer:

225.58

Explanation:

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