Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?
A)$17,000
B)$36,400
C)$50,313
D)$123,023
E)$150,000

Question

Quizplus · Accepted Answer

To find the worth of the stamp collection today, we need to use the compound interest formula:

A = P(1 + r/n)^(n*t)

where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time period in years.

In this case, P = $5,000, r = 8%, n = 1 (compounded annually), and t = 30. Plugging these values into the formula, we get:

A = $5,000(1 + 0.08/1)^(1*30)
A = $5,000(1.08)^30
A = $50,313.28

Therefore, the stamp collection is worth $50,313.28 today. The closest answer choice is C.

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