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Taya2010 [7]
3 years ago
5

A coin sold at auction in 2017 for $1,965,500. The coin had a face value of $5 when it was issued in 1794 and had previously bee

n sold for $305,000 in 1971. a. At what annual rate did the coin appreciate from its first minting to the 1971 sale
Business
1 answer:
aksik [14]3 years ago
4 0

Answer:

0.0642 or 6.42%

Explanation:

The period 't' between the year when the coin was issued, 1794, and 1971 is:

t=1971-1794 \\t=177\ years

If the coin had a value of $5 and after a period of t=177 years it was worth $305,000, the annual tax rate by which the coin appreciated is determined by:

305,000 = 5*(1+r)^{177}\\r=\sqrt[177]{61,000}-1\\r=0.0642=6.42\%

The annual rate was 0.0642 or 6.42%.

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beta of 0.88 and an expected dividend growth rate of 4.00% per year. The T-bill rate is 4.00%, and the T-bond rate is 5.25%. The
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