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Suppose that the value of an investment in the stock market has increased at an average compound rate of about 5% since 1904. It is now 2016a. If someone invested $1,000 in the stock market in 1904, how much would that investment be worth today? (Do not round intermediate Calculations)

Question

Suppose that the value of an investment in the stock market has increased at an average compound rate of about 5% since 1904. It is now 2016

a. If someone invested $1,000 in the stock market in 1904, how much would that investment be worth today? (Do not round intermediate Calculations)

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Step 1

Calculation of Worth of Investment Today:

With the current year being 2016, there are totally 112 year between year 1904 and year 2016.

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Step 2

The worth of investment can also be calculated using a excel function =FV. The excel spreads...

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