Today, you have two coins each of which is valued at $100. One coin is expected to appreciate by 5.2 percent annually while the other coin should appreciate by 5.7 percent annually. What will be the difference in the value of the two coins 50 years from now?
A) $337.43
B) $318.04
C) $191.79
D) $128.32
E) $380.15

Question

Quizplus · Accepted Answer

To find the difference in value after 50 years, calculate the future value of each coin using the formula FV = PV * (1 + r)^n. For the first coin: FV1 = $100 * (1 + 0.052)^50. For the second coin: FV2 = $100 * (1 + 0.057)^50. The difference is FV2 - FV1 = $1,898.29 - $1,560.86 = $337.43.

Today, You Have Two Coins Each of Which Is Valued