Question

A certain gentleman acquired 54 gold bonds issued by the Weimar Republic in 1934. The value of each was 2500 troy ounces of gold. The bonds matured in 1954, at which time the value of each was 2500 troy ounces of gold at 1954 prices. The price of gold at that time was around $350 per troy ounce. The bonds could not be redeemed because in 1954 there was no single German country—it had been divided into two nations. But provisions of the bond stated that from 1954 onward the unredeemed bonds grew in value according to the exponential formula Value = Initial value × 1.00019365t, where t is the number of years since 1954. What was the total value of this man's 54 bonds in 2014? Give your answer in billions of dollars rounded to two decimal places. $ billion If the bonds remain unredeemed in 2028, what will be their total value? Give your answer in billions of dollars rounded to two decimal places.

Answer 1

Answer:

Step-by-step explanation:

54 gold bond in 1934, worth 2500 troy ounces per gold

Price of gold $350 per troy ounce

Value of bond grew from the year 1954 when Germany divided

Value = Initial value × 1.00019365t,

Value of the bond in t=2014

The time is t=2014-1954=60years

a. If initial bond is 54

Then,

Value = Initial value × 1.00019365t,

Value= 54×1.00019365×60

Value=3240.63bonds

So the bond in 2014 is 3240.63 bonds

b. If the bond remains to 2028

Then the time elapse is

t=2028-1954=74years

Therefore

Value = Initial value × 1.00019365t,

Value = 54 × 1.00019365×74

Value =3996.77 bonds

Since each bond is 2500 troy ounces

Then, 3996.77bonds is equivalent to 9,991,934.56 troy ounces

And also 1 troy ounces is equivalent to $350

Then

The value of the golds in 2028

Is 9,991,934.56×350 =$3,497,177,097.225

Then, the value is 3.497billions dollars

Which is approximately 3.50 billions dollars