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The price of the latest incredible iThing from Apple starts at $200 when it is first released. Every year it gets better but the price goes up 8%. What is the price after 20 years? [You can see problems just like this one in the Gateway Exams section of our website. The screencast shows how to solve this among others].

Guest Jun 24, 2018

Best Answer 

 #1
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You can use a formula like this to solve that:

 

FV = PV x [1 + R]^N, where FV=Future value, PV=Present value, R=Rate(of interest), N= Number of periods.

FV = 200 x [1 + 0.08]^20

FV = 200 x[1.08]^20

FV = 200 x    4.6609571........

FV = $932.19 - The price of Apple's iThing after 20 years.

Guest Jun 24, 2018
edited by Guest  Jun 24, 2018
 #1
avatar
+1
Best Answer

You can use a formula like this to solve that:

 

FV = PV x [1 + R]^N, where FV=Future value, PV=Present value, R=Rate(of interest), N= Number of periods.

FV = 200 x [1 + 0.08]^20

FV = 200 x[1.08]^20

FV = 200 x    4.6609571........

FV = $932.19 - The price of Apple's iThing after 20 years.

Guest Jun 24, 2018
edited by Guest  Jun 24, 2018

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