Question

In 1895, the first Putting Green Championship was held. The winner's prize money was$160. In 2010, the winner's check was $1,360,000.What was the percentage increase per year in the winner's check over this period? (Donot round intermediate calculations and round your final answer to 2 decimal places.(e.g., 32.16)Interest rateIf the winner's prize increases at the same rate, what will it be in 2039? (Do not roundintermediate calculations and round your final answer to 2 decimal places. (e.g.,32.16)Future value

Answer 1

Given,

The winner's prize in 1895 is $160.

The winner's prize in 2010 is $1360000.

a) The rate of interest is calculated as,

$A=P(1+\frac{R}{100})^t$

Here, A is the winner's prize in 2010.

P is the winner's prize in 1895.

t is the change in time.

$A=P(1+\frac{R}{100})^t$