Question

In March 1963, Iron Man was introduced in issue 39 of the comic book Tales of Suspense. The original price for the book was 12 cents. By March 2016, 53 years later, the value of the comic book given its condition had risen to $10,000. What rate of interest would you have earned if you had bought the comic book in 1963 and sold it for $10,000?

A. 7.2%
B. 8.5%
C. 9.8%
D. 10.3%

Answer 1

To calculate the interest rate earned by buying the comic book in 1963 and selling it for $10,000 in 2016, we can use the compound interest formula. The rate of interest earned would be approximately 7.2%.

Step-by-step explanation:

To calculate the interest rate earned by buying the comic book in 1963 and selling it for $10,000 in 2016, we can use the compound interest formula:

A = P(1+r/n)^(nt)

Where:
A = Final amount ($10,000)
P = Principal amount (initial price of the comic book)
r = Annual interest rate (unknown)
n = Number of times the interest is compounded per year (assume annually)
t = Number of years (53)

Rearranging the formula, we get:

r = (A/P)^(1/nt) - 1

Plugging in the values, we have:

r = (10,000/0.12)^(1/(53*1)) - 1

r ≈ 0.0723 = 7.23%

Therefore, the rate of interest earned would be approximately 7.2%, which corresponds to option A.