Answer:
The value of first coin will be $151.51 more than second coin in 15 years.
Step-by-step explanation:
You have just purchased two coins at a price of $670 each.
You believe that first coin's value will increase at a rate of 7.1% and second coin's value 6.5% per year.
We have to calculate the first coin's value after 15 years by using the formula
[tex]A=P(1+\frac{r}{100})^{n}[/tex]
Where A = Future value
P = Present value
r = rate of interest
n = time in years
Now we put the values
[tex]A=670(1+\frac{7.1}{100})^{15}[/tex]
[tex]A=670(1+0.071)^{15}[/tex]
[tex]A=670(1.071)^{15}[/tex]
A = (670)(2.797964)
A = 1874.635622 ≈ $1874.64
Now we will calculate the value of second coin.
[tex]A=670(1+\frac{6.5}{100})^{15}[/tex]
[tex]A=670(1+0.6.5)^{15}[/tex]
[tex]A=670(1.065)^{15}[/tex]
A = 670 × 2.571841
A = $1723.13
The difference of the value after 15 years = 1874.64 - 1723.13 = $151.51
The value of first coin will be $151.51 more than second coin in 15 years.
