Question

Your coin collection contains 57 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2055, assuming they appreciate at an annual rate of 6.4 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

$ 33,951.78

Explanation:

For this problem, you wan to know the future value of these coins later in 2055. For future value (FV), you need the rate, number of periods that occur (NPER), payment (PMT), and the present value (PV).

Currently, you know that you Present Value is 57, because that is how many silver dollars you have ($1 per coin). The rate is given: 6.4%. The number of periods is found by taking the year 2055 and subtracting 1952; 2055-1952=103. Then the payment is 0 here.

Rate: 6.4%

Nper: 103

PMT: 0

PV: 57

The formula for FV = PV [(1+rate)^NPER]. Or you use the function in excel of =FV(rate,nper,pmt,pv) to solve.

That should get you the answer of 33,951.78.