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Winston typically spends about $200 per year playing the lottery. If he took that same
amount of money, for 30 years, and invested it in an index fund earning an average of
6%, approximately how much money would Winston have?
A. More than $12,000, because the investment will grow faster over time as the interest
compounds.
B. Less than $6000, because inflation would make his money less valuable.
C. Exactly $6000.
D. Approximately $6360, because he earns almost $400 in interest.

Sagot :

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Answer:

point!!!!!!!

Step-by-step explanation:

Parrainidn

Winston would have A. More than $12,000, because the investment will grow faster over time as the interest  compounds.

If Winston invested $200 every year at 6% for 30 years, the $200 would be an annuity and the future value of an Annuity is calculated as:

= Annuity x ( (1 + rate) ^ number of years - 1) / rate

= 200 x ( ( 1 + 6%) ³⁰ - 1) / 6%

= $15,811.64

Winston would have $15,811.64 which is more than $12,000 because compounded interest makes investments grow faster.

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