Question

In 1895, the first sporting event was held. The winner's prize money was $170. In 2007, the winner's check was $1,173,000. (Do not round your intermediate calculations.)
a. What was the percentage increase per year in the winner's check over this period?
b. If the winner's prize increases at the same rate, what will it be in 2040?

Answer 1

Answer:

Explanation:

In 1985, winner's prize money = $170

in 2007 winner's cheque = $ 1,173,000

percentage increase per year:

170 * ( 1 + r)^n = 1173000

(1+r)^112 = 6900

r = 8.212%

b)  If the winner's prize increases at the same rate, amount will it be in 2040

= $170 * (1+8.212%)^145  = $15,863,002