a mutual fund has an average annual rate of 12.45%. The investment company charges 2% per year as a fee for managing the account. Suppose $1000 is invested for three years. Calculate the approximate value of the investment, assuming annual compounding.
+23254 $1000.00 is invested.
2% of $1000.00 is deducted: $20.00 is deducted; leaving $980.00
12.45% increase of $980.00 is $122.01; at the end of the year, the value is: $1102.01.
Next year: 2% ($22.04) is deducted; leaving $1079.97.
12.45% increase ($134.46) is added; at the end of the year, the value is: $1214.43.
Can you take this forward one more year?
+23254 $1000.00 is invested.
2% of $1000.00 is deducted: $20.00 is deducted; leaving $980.00
12.45% increase of $980.00 is $122.01; at the end of the year, the value is: $1102.01.
Next year: 2% ($22.04) is deducted; leaving $1079.97.
12.45% increase ($134.46) is added; at the end of the year, the value is: $1214.43.
Can you take this forward one more year?
