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            $

Answer 1

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.)

Period from 1896 to 2015 = 119 years

Prize money in 1896 = $160

Prize money in 2015 = $1,610,000

Annual percentage = 160 x(1+r)^119 = 1610000

Annual percentage = (1+r)^119 = 1610000/160

Annual percentage = (1+r)^119 = 10062.5

Annual percentage = (1+r) = 10062.5^(1/119) => 1.08053

Or
  
Annual percentage             8.05%
  
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.)
  

Period from 2015 to 2044 = 29 years

Prize money in 2044 will be = 1610000 x (1+8.05%)^29

= 1610000 x 9.44318212

= 15,203,523.21

Prize money            $15,203,523.21