The annual increase in the value of a particular investment

The annual increase in the value of a particular investment is iA0eif, where A0 is the amount of money initially invested, i is the interest rate expressed as a fraction or decimal (not a percent), and t is the time over which the investment has been growing. While the value of this investment increases over time as indicated, the amount of goods and services that money could buy does not increase as rapidly because of inflation. Inflation reduces the buying power of the investment annually by dA0edt, where d is the rate of inflation expressed as a fraction. If i = 0.07/yr and d = 0.01/yr, how much additional buying power will an initial investment of $10,000 earn over ten years? Round to the nearest dollar. $29,086 $9086 $19,086 $1299

Solution

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