Elena purchased a stamp collection for $5,000 30 years ago. If its value appreciated at 8% annually, what is it worth today? (Round the answer to the nearest dollar.)
A) $17,000
B) $36,400
C) $50,313
D) $123,023
E) $150,000

Question

Quizplus · Accepted Answer

Using the formula for compound interest: 
A = P(1 + r/n)^(n*t)
where 
A = final amount 
P = initial amount 
r = annual interest rate (as a decimal) 
n = number of times interest is compounded per year 
t = number of years

We have: 
A = 5000(1 + 0.08/1)^(1*30) 
A = $50,313

Therefore, the stamp collection is worth $50,313 today.

Elena Purchased a Stamp Collection for $5,000 30 Years Ago