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

Question

Quizplus · Accepted Answer

To find the value of the stamp collection today, we can use the formula for compound interest: 
A = P(1 + r/n)^(nt)
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

Plugging in the values, we have 
A = 5000(1 + 0.08/1)^(1*30)
A = 5000(1.08)^30
A = 50,312.91

Rounding to the nearest unit place gives us a value of $50,313, which is answer choice C.

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