Q:

Help me! A coin collection is purchased for $1,000. Twenty years later, the owner is told that the collection is worth quite a bit of money! If the rate of return on the stamp collection is 4% per year, what is the current value of the stamp collection? In your final answer, include all of your calculations.

Accepted Solution

A:

[tex]y = 1000(1 + 0.04)^{20} [/tex]
[tex]y = 1000(1.04) {}^{20} [/tex]

Rounded to the nearest hundredth
[tex]y = 1000(2.19)[/tex]
[tex]y = 2190[/tex]
The current value is about $2190