Please answer correctly 11· value: 0.00 points In 1895, the first Putting Green

Question

Please answer correctly

11· value: 0.00 points In 1895, the first Putting Green Championship was held. The winner's prize money was $220. In 2014, the winner's check was $1,460,000 What was the percentage increase per year in the winner's check over this period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Increase per year If the winner's prize increases at the same rate, what will it be in 2041? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Winner's prize in 2041

Explanation / Answer

PV = 220

FV = 1460000

N = 2014-1895 = 119

PV = FV/(1+r)^n

PV - Present value

FV - Future value

r - Interest rate

n - no. of periods

220 = 1460000/(1+r)^119

r = 0.0768 = 7.68%

Increase per year = 7.68%

B.

N = 2041-2014 = 27

FV = 1460000*(1+0.0768)^27 = $10752599.84

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