The value of a stock increases at a rate of 1/2% per year. If the initial value of the stock $40 a share, when will the value of the stock be $50? Round your answer to the nearest tenth of a year
Accepted Solution
A:
Answer:After 50 years the stock value will be $50 per share.Step-by-step explanation:Simple Interest Equation (Principal + Interest)A = P(1 + rt)Where:A = Future amont = $50P = Principal Amount = $40r = Rate of Interest per year in decimal; r = R/100 = 0.5/100 = 0.005t = Time Period involved in months or years Plug in the values50 = 40(1 + 0.005t)50 / 40 = (1 + 0.005t)5/4 = 1 + 0.005t5/4 - 1 = 0.005t0.25 = 0.005tt = 0.25 / 0.005t = 50 years