Question

Al Rosen invests $18,000 in a mint condition 1952 Mickey Mantle Topps baseball card. He expects the card to increase in value 11 percent per year for the next 11 years.

How much will his card be worth after 11 years? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Projected value ____ $.

Answer 1

Answer:

$56,731.63

Explanation:

Data provided in the question:

Amount invested = $18,000

Rate of increase in value per year = 11% = 0.11

Time period, n = 11 years

Now,

The future value i.e the worth of his card after 11 years will be given as:

Future value = Amount invested × ( 1 + rate )ⁿ

on substituting the respective values, we get

Future value = $18,000 × ( 1 + 0.11 )¹¹

or

Future value = $18,000 × (1.11)¹¹

or

Future value = $18,000 × 3.1517573

or

Future value = $56,731.63