1 answer

4. Legend states that Pieter Minuit, Director General of the New Netherlands colony, purchased Manhattan from...

Question:

4. Legend states that Pieter Minuit, Director General of the New Netherlands colony, purchased Manhattan from Seyseys, chief of the Canarees, a Native American tribe, for the sum equivalent to $24 in 1626. If annual appreciation of 7% was earned on that investment, what would be the value of Manhattan in 2019. a. Consider SIMPLE INTEREST b. Consider COMPOUND INTEREST
4. Legend states that Pieter Minuit, Director General of the New Netherlands colony, purchased Manhattan from Seyseys, chief of the Canarees, a Native American tribe, for the sum equivalent to $24 in 1626. If annual appreciation of 7% was earned on that investment, what would be the value of Manhattan in 2019. a. Consider SIMPLE INTEREST b. Consider COMPOUND INTEREST

Answers

Principal = $24

Time from 1626 to 2019 = 393 years

Rate of Appreciation = 7%

a) Using Simple Interest

SI = (P*R*T)/100

SI = (24*7*393)/100 = $660.24

Value in 2019 = 24+660.24 = $684.24

b) Using Compound interest rate

A = P(1+r/100)T

A= 24*(1.07)393

Value in 2019 will be A = $8472973966004.32

.

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