Question

In 1907, the first green jacket golf championship was held. the winner’s prize money was $270. in 2015, the winner’s check was $1,630,000.what was the annual percentage increase in the winner’s check over this period? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.)

Answer 1

Answer:

8.91%

Explanation:

Future value is the value of a commodity or asset after a particular period of time. It is the measure of the nominal time value of money that a given amount of money will "worth" at a specified period in the future with respect to a given rate of return; it is the multiplication of present value and  the accumulation function.

Future value F = P (1 + r) ^t where P is present value

t= 2015-1907=102

1,630,000 = 270(1 + r) ^102

$\sqrt[102]{\frac{1,630,000}{270} } = 1 \ + \ r$

1.089 = 1 + r

r = 0.0891 or 8.91%

Answer 2

The answer is 8.80%.
Explanation:
To answer this question we should use either the formula of present value (PV) or Future value (FV) . Either of them will give the answer because they are inverse to each other.

FV = PV(1 + r) ^t
Solving r, we get
r = (FV/FV)^(1-t) - 1
r = ($1,630,000 / $270)^(1-102) - 1
r = 0.0891 or 8.91%