Question

Your coin collection contains 58 1952 silver dollars.

If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2054, assuming they appreciate at an annual rate of 6.5 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Value of Collection?

Please include step by step financial calculator instructions if possible :)

Answer 1

Step 1

Note - Face value of silver conins is not specifically given in the question (we are assuming a Face Value of $1000)

Step 2 - Calculation of number of years

Number of years from 1952 to 2054 = 2054 -1952 = 102 Years

Step 3 - Compounding

Now we will compound initial investment of 58 coins of face value 1000 (ie $ 58000) invested in 1952 for 102 years at 6.5% per annum.

Future Value of Collection in year 2054 = 58000 * (1.065)^102 = 35,734,522.77

Step 4 - Calculation using a Financial Calculator

PV = -58000

N = 102

I/Y = 6.5

CPT - FV = 35,734,522.77