Question

A collector of rare books has a first edition book worth 418.00, which he anticipates will grow in value at a rate if 5% per year. How much will this book be worth 10 years from now?

Answer 1

Let's list down the given information.

Initial Value - 418.00

Growth Rate - 5% or 0.05 per year

Time - 10 years

To determine the final value of the first edition book after 10 years, we have the formula below:

`F=P(1+r)^t`

where F = final value, P = initial value, r = rate in decimal form, and t = time in years.

Let's plug in the given information to the formula above.

`F=418(1+0.05)^(10)`

Then, solve.

Add first what is inside the parenthesis.

`F=418(1.05)^(10)`

Next, simplify the exponent.

`F=418(1.62889)`

Lastly, multiply the remaining numbers.

`F\approx680.88`

Hence, after 10 years, the book will have cost 680.88.