Question

The winner of the first annual Tom Morris Golf Invitational won $165 in the competition which was held in 1907. In 2015, the winner received $1,540,000. If the winner's purse continues to increase at the same interest rate, how much will the winner receive in 2041

Answer 1

$13,899,048.24

Step-by-step explanation:

Calculation for how much will the winner receive in 2041

Using this formula

A=P(1+r/100)^n

Let plug in the formula

1,540,000=165*(1+r/100)^108

Note (1907-2015) will give us 108 years

(1,540,000/165)^(1/108)=(1+r/100)

=9,333.33^(1/108)=(1+r/100)

(1+r/100)=1.0883

r=1.0883-1

=0.0883

A=$1,540,000*(1+0.0883)^26

A=$1,540,000*(1.0883)^26

A=$1,540,000*9.025356

A=$13,899,048.24

Note (1907-2041) will give us 134 years

Hence,

134 years -108 years =26 years

Therefore how much will the winner receive in 2041 will be $13,899,048.24