Question

2018 copper penny struck at the Philadelphia mint in 1794 was sold for 345000 rate of return

Answer 1

Answer:

The rate of return is 8%.

Step-by-step explanation:

The time span from 1794 to 2018 is (2018 - 1794) = 224 years.

Now, a penny i.e. 0.01 pounds of money as a principal gets the final sum of 345000 pounds after 224 years.

Here we have to calculate the rate of return if the interest is compounded yearly.

Using the formula of compound interest of r% APR, we get

$345000 = 0.01 (1 + \frac{r}{100})^{224}$

⇒ 1 + 0.01r = 1.08

⇒ 0.01r = 0.08

⇒ r = 8% (Answer)