Question
In: Finance
Julian was given a gold coin originally purchased for $1 by his great-grandfather 50 years ago....
Julian was given a gold coin originally purchased for $1 by his great-grandfather 50 years ago. Today the coin is worth $450. The rate of return realized on the sale of this coin is approximately equal to
Solutions
Expert Solution
| Solution: | ||
| The rate of return realized on the sale of this coin is approximately equal to 13% | ||
| Working Notes: | ||
| present value = PV = $1 deposited 50 years ago | ||
| rate = i = ?? =rate of return realized on the sale | ||
| Period=n = nper = 50 is no of years | ||
| FV= Future value at end of 50 years =$450 value after 50 years | ||
| Future value FV =PV x (1+i)^n | ||
| 450 =1 x (1+ i)^50 | ||
| i= 450^(1/50) - 1 | ||
| i= 0.129963071 | ||
| i= 0.1300 | ||
| i= 13.00% | ||
| By Excel method | ||
| present value = PV = -$1 deposited 50 years ago as it was cash outflow | ||
| rate = i = ?? | ||
| Period=n = nper = 50 is no of years | ||
| PMT = $0 the annual deposit which is not done so ZERO | ||
| FV= Future value at end of 50 years =$450 value after 50 years | ||
| EXCEL | ||
| =RATE(nper,pmt,pv,fv) | ||
| =RATE(50,0,-1,450) | ||
| 0.129963071 | ||
| 13.00% | ||
| Please feel free to ask if anything about above solution in comment section of the question. | ||
jeff jeffy answered 8 months agoRelated Solutions
Your great-great-great-grandfather lost $51 playing poker at a fur-trading post in Wyoming 160 years ago. If...
Your great-great-great-grandfather lost $51 playing poker at a
fur-trading post in Wyoming 160 years ago. If he had not lost the
money playing poker and instead he had deposited the $51 in a
savings account earning 5% interest compounded annually, how much
would be in the account today?
A machine currently in use was originally purchased 2 years ago for $40,000.The machine is being...
A machine currently in use was originally purchased 2 years ago
for $40,000.The machine is being depreciated under MACRS using a
5-year recovery period;it has 3 years of usable life remaining. The
current machine can be sold today to net $42,000 after removal and
cleanup costs.A new machine,using a 3-year MACRS recovery
period,can be purchased at a price of $140,000. It requires $10,000
to install and has a 3-year usable life.If the new machine were
acquired, the investment in accounts...
1. Why is this fintech revolution happening now, not 50 years ago, not 50 years later?...
1. Why is this fintech revolution happening now, not 50 years
ago, not 50 years later?
2. How big data supports Fintech credit scoring? Will
that raise any ethical problems? Any law enforcement on
that?
3. Comparing the emerging of derivatives innovations
decade years ago and Fintech, are there any similarities,
dissimilarities? Do you think Fintech will replace derivatives’
role, or it will complete derivatives’ role?
Question 1 The GFA Company, originally established 16 years ago to make football, is now a...
Question 1
The GFA Company, originally established 16 years ago to make
football, is now a leading producer of tennis balls, baseballs,
footballs, and golf balls. Nine years ago, the company introduced
“High Flite,” its first line of high-performance golf balls. GFA
management has sought opportunities in whatever businesses seem to
have some potential for cash flow. Recently Mr. Dawadawa, vice
president of the GFA Company, identified another segment of the
sports ball market that looked promising and that he...
Five years ago, Jason purchased a $400,000 life insurance policy on his life. For each of...
Five years ago, Jason purchased a $400,000 life insurance policy
on his life. For each of the following, indicate how much of the
$400,000 policy proceeds are included in his gross estate.
a) The proceeds are payable to his estate.
b) The proceeds were paid to his daughter, but Jason retained
the right to change beneficiaries.
c) $100,000 of the proceeds are used to pay debts of his estate
with the balance paid to his daughter. Jason retained no rights...
James purchased a used truck in February, two years ago, for his flower shop to make...
James purchased a used truck in February, two years ago, for his
flower shop to make deliveries. He purchased the truck for 8,029.
He is selling the truck in July for 6,073. The truck weighs 4,500
lbs and was designed specifically for the flower shop. What is his
depreciation for his truck?
(This is all the information provided in the question. The
answer is 771 I just want to know how to get to that answer)
Why is this fintech revolution happening now, not 50 years ago, not 50 years later?
Why is this fintech revolution happening now, not 50 years ago,
not 50 years later?
Melisa was distraught. While her grandfather was getting on in years his loss had come as...
Melisa was distraught. While her grandfather was getting on in
years his loss had come as a shock late that Friday afternoon. She
could think of no immediate family to contact and wandered her
apartment wondering what to do. Finally at 9pm she realized she
would have to do something so she called the closest funeral home
to her grandfather ‘Lost Days Funeral Home’. Not expecting an
answer so late she left a message hoping to hear back from them...
Melisa was distraught. While her grandfather was getting on in years his loss had come as...
Melisa was distraught. While her grandfather was getting on in
years his loss had come as a shock late that Friday afternoon. She
could think of no immediate family to contact and wandered her
apartment wondering what to do. Finally at 9pm she realized she
would have to do something so she called the closest funeral home
to her grandfather ‘Lost Days Funeral Home’. Not expecting an
answer so late she left a message hoping to hear back from them...
Mr. Wilson’s house as purchased fir $280,000 five years ago and worth $300,000 now, and his...
Mr. Wilson’s house as purchased fir $280,000 five years ago and
worth $300,000 now, and his mortgage was $260,000 and amortized
over 25 years, at four percent interest, compounded semi-annuallu,
what is his equity in the house now? ( To the nearest $1000)(show
you calculation - You must assume monthly mortgage payment
frequency; hint, and use amortization schedule)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- If you wanted to store a birthday within code, what class would you use in Java?...
- Explain what is meant by the Theme Park internal and external business environment and use the...
- Description Write a program that prints out your name, the course ID of this class, what...
- A project has an initial cost of $65,475, expected net cash inflows of $12,000 per year...
- Make a program that lets the user enter a positive or negative integer as many times...
- using java, parse a text file to be able to list the word(s) with the highest...
- Consider the following linear programming problem: Maximize 10X + 8Y Subject to: 40X + 24Y <=...
ADVERTISEMENT