Question

6. An $8,750 Rolex watch appreciates by 24% every 20 years. Find the value of the watch after 30.

Answer 1

$168,735.00.

Explanation:

To solve this problem, we can use the formula for compound interest:

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

where A is the final amount, P is the principal (initial amount), r is the annual interest rate as a decimal, n is the number of times the interest is compounded per year, and t is the time in years.

In this case, we have P = $8,750, r = 24% = 0.24, n = 1 (compounded annually), and t = 30 years. Plugging in these values, we get:

A = $8,750(1 + 0.24/1)^(1*30)

A = $8,750(1.24)^30

A = $8,750(19.284)

A = $168,735.00

Therefore, the value of the watch after 30 years is $168,735.00.

Answer 2

To find the value of the watch after 30 years, we can use the formula:

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

Where:

V = final value

P = initial value

r = annual interest rate (as a decimal)

n = number of times interest is compounded per year

t = time in years

In this case, P = $8,750, r = 24% = 0.24, n = 1 (compounded annually), and t = 30.

Plugging in the values, we get:

V = 8,750(1 + 0.24/1)^(1*30)

V = 8,750(1.24)^30

V ≈ $407,180.24

Therefore, the value of the watch after 30 years is approximately $407,180.24.