Joel has a vintage comic book worth $360. According to a dealer, the value of this particular comic book will increase by 5% each year. How much will the comic book be worth in 15 years?
Question
Joel has a vintage comic book worth $360. According to a dealer, the value of this particular comic book will increase by 5% each year. How much will the comic book be worth in 15 years?
Solution
To solve this problem, we can use the formula for compound interest, which is A = P(1 + r/n)^(nt). In this case, the initial principal balance P is the current worth of the comic book, which is $360. The annual interest rate r is 5%, or 0.05 when expressed as a decimal. The number of times that interest is applied per time period n is 1, since the value increases annually. The number of time periods t is 15 years.
Substituting these values into the formula, we get:
A = 360(1 + 0.05/1)^(1*15) A = 360(1 + 0.05)^(15) A = 360(1.05)^(15)
Calculating this out, we find that the comic book will be worth approximately $582.92 in 15 years.
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