6. Today, you bought a share of stock for $50. You expect it to grow in value 25% compounded
annually. How much will your share of stock be worth in 4 years if your assumption is correct. 


To calculate the future value of your stock investment, which grows at a compound interest rate of 25% annually, you can use the compound interest formula:

\[
A = P(1 + r)^t
\]

Where:
- $ A $ is the future value (the value of the stock after 4 years).
- $ P $ is the initial investment (in this case, $50).
- $ r $ is the annual growth rate (25%, or 0.25).
- $ t $ is the time in years (4 years).

Now, let's plug in the values:

\[
A = 50(1 + 0.25)^4
\]
\[
A = 50(1.25)^4
\]

Next, we'll calculate the future value.

\[
A = 50 \times 2.4414 \approx 122.07
\]

Thus, after 4 years, the value of the stock would be approximately **$122.07**.

Would you like any further details on this calculation?

Here are 5 related questions:
1. What if the interest was compounded monthly instead of annually?
2. How would the result change if the growth rate was 20% instead of 25%?
3. How would the formula change if the time period was expressed in months instead of years?
4. What if the stock had an additional fixed dividend payment each year?
5. How does compound interest differ from simple interest?

**Tip:** Compound interest grows faster over time compared to simple interest because interest accumulates on both the initial principal and the accumulated interest.

Today, you bought a share of stock for $50. You expect it to grow in value 25% compounded annually. How much will your share of stock be worth in 4 years if your assumption is correct?

Learn how to calculate the future value of a stock purchased for $50 with a 25% annual compound growth rate over 4 years. This problem utilizes the compound interest formula, making it ideal for students in Grades 9-12 or anyone looking to understand exponential growth.

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