Question

Joshua’s Babe Ruth baseball card is worth 500,000. If the value continues to grow by 2% each year, how much will the card be worth in 5 years?

Answer 1

Joshua's Babe Ruth baseball card will be worth $550,000 in 5 years if its value continues to grow by 2% each year.

Explanation:

To calculate the value of Joshua's Babe Ruth baseball card in 5 years, we need to apply the 2% growth rate per year to the initial value of $500,000.

Step 1: Calculate the growth rate:

2% of $500,000 = 0.02 * $500,000 = $10,000

Step 2: Calculate the value after 5 years:

Value after 5 years = Initial value + (Growth rate * Number of years)

Value after 5 years = $500,000 + ($10,000 * 5)

Value after 5 years = $500,000 + $50,000

Value after 5 years = $550,000

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Answer 2

552,040

Explanation:

You want to know the value in 5 years of a 500,000 baseball card that grows in value at 2% per year.

Future value

The value is given by ...

A = P(1 +r)^t

where r is the annual growth rate, P is the initial value, and t is the number of years.

A = 500,000(1 +.02)^5 ≈ 552,040.40

In 5 years the card will be worth about 552,040.