Craig invested $131,995 in the Dow-Jones Industrial Average Stocks when the average index was 2,896. Ten years later, Craig's investment was worth $590,000. What must the index have been ten years later?
Round your final answer properly to the nearest whole number.
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Craig invested $131995 in the Dow-Jones Industrial Average stocks when the average index was at 2896. Ten years later his investment was worth $590000. Assume the change in the value of his investment is the same as the change in the Dow Jones Average.
The value of the index after 10 years was `(590000/131995)*2896` ` ~~` 12945
The required value of the Dow Jones average is 12945
It is given that Craig invested $131,995 in the Dow-Jones Industrial Average Stocks when the average index was 2,896. After 10 years his investment was worth $590,000.
The ratio of the initial investment to the final value, is equal to the ratio of the index value at the time of investment to the final index value.
131995/590000 = 2896/X where X is the index value after 10 years.
X = (590000/131995)*2896
After 10 years the index was at 12944.
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