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A collector of rare books has a first edition book worth 418.00, which he anticipates will grow in value at a rate if 5% per year. How much will this book be worth 10 years from now?

Respuesta :

Let's list down the given information.

Initial Value - 418.00

Growth Rate - 5% or 0.05 per year

Time - 10 years

To determine the final value of the first edition book after 10 years, we have the formula below:

[tex]F=P(1+r)^t[/tex]

where F = final value, P = initial value, r = rate in decimal form, and t = time in years.

Let's plug in the given information to the formula above.

[tex]F=418(1+0.05)^{10}[/tex]

Then, solve.

Add first what is inside the parenthesis.

[tex]F=418(1.05)^{10}[/tex]

Next, simplify the exponent.

[tex]F=418(1.62889)[/tex]

Lastly, multiply the remaining numbers.

[tex]F\approx680.88[/tex]

Hence, after 10 years, the book will have cost 680.88.

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