Questions: Question 3 1 pts Bobby invested 9,255 in a certain stock 8 years ago. If he sells his shares today, his rate of return would be 7.4%. How much money would he earn if he sells his shares today? Round your answer to the nearest dollar.

Solution Steps

To find out how much money Bobby would earn if he sells his shares today, we need to calculate the total value of his investment after applying the rate of return. The rate of return is given as a percentage, so we will convert it to a decimal and apply it to the initial investment to find the earnings. Finally, we will round the result to the nearest dollar.

The rate of return is given as \( 7.4\% \). To convert this percentage into a decimal, we use the formula: \[ \text{Rate of Return} = \frac{7.4}{100} = 0.074 \]

To find the total value of Bobby's investment after 8 years, we apply the rate of return to the initial investment of \( 9,255 \): \[ \text{Total Value} = \text{Initial Investment} \times (1 + \text{Rate of Return}) = 9255 \times (1 + 0.074) = 9255 \times 1.074 = 9939.87 \]

Finally, we round the total value to the nearest dollar: \[ \text{Total Value (Rounded)} = \text{round}(9939.87) = 9940 \]

Final Answer