In 1896, the first Green Jacket Golf Championship was held. The winner’s prize m
ID: 2809453 • Letter: I
Question
In 1896, the first Green Jacket Golf Championship was held. The winner’s prize money was $160. In 2015, the winner’s check was $1,610,000.
What was the annual percentage increase in the winner’s check over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Annual percentage %
If the winner’s prize increases at the same rate, what will it be in 2044? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Prize money $
Explanation / Answer
2015-1896 = 119 Years
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1.
Annual percentage = (Present value / Prize value in 1896)^(1/Years) -1
Annual percentage = ($1610000 / $160)^(1/119) -1
Annual percentage = 8.052839%
Annual percentage = 8.05%
2.
2044-1896 = 148 Years
Prize money = Price money 1896 x (1+Annual percentage)^Years
Prize money = 160 x (1+8.052839%)^148
Prize money = $15,215,104.30