## Related questions with answers

(a) The purchase of Alaska cost the United States $\$ 7$ million in $1869$. If this money had been placed in a savings account paying $6 \%$ compounded annually, how much money would have been available from this investment in $2015$?

(b) If the $7 million earned 7% compounded annually since$1869$, how much would have been available in$2015$?

( c ) Do you think either amount would have purchased Alaska in$2015$? Explain in light of the value of Alaska's resources or perhaps the price per acre of land.

Solution

Verified**(a)**
To determine how much money would be available from this investment in $2015$ given that the purchase of Alaska cost $\$7$ million in $1869$ and the money is in a saving account earning $6\%$ compounded annually we will use this equation below.

$S=P(1+i)^n$

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