When Da Vinci's first airplane model was sold at auction in 1895, it went for $210. In 2016, the original owner sold the paininting again and this time Sotheby's auctioneers were able to sell it for the staggering sum of $1,410,000. What was the annual percentage increase in price of the painting over this period? YDo not round intermediate calculations and enter your answer as a percent, rounded to 2 decimal places, e.g., 32.16.) b. How much money should the painting be worth in 2034 if the price of the painting increases at the same rate as (a)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a.
When Da Vinci's first airplane model was sold at auction in 1895, it went for $210. In 2016, the original owner sold the paininting again and this time Sotheby's auctioneers were able to sell it for the staggering sum of $1,410,000. What was the annual percentage increase in price of the painting over this period? YDo not round intermediate calculations and enter your answer as a percent, rounded to 2 decimal places, e.g., 32.16.) b. How much money should the painting be worth in 2034 if the price of the painting increases at the same rate as (a)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:When Da Vinci's first airplane model was sold at auction in 1895, it went for $210. In
2016, the original owner sold the paininting again and this time Sotheby's auctioneers
were able to sell it for the staggering sum of $1,410,000.
What was the annual percentage increase in price of the painting over this period?
YDo not round intermediate calculations and enter your answer as a percent,
rounded to 2 decimal places, e.g., 32.16.)
b. How much money should the painting be worth in 2034 if the price of the painting
increases at the same rate as (a)? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
a.
Expert Solution
Step 1
Given information:
Present value of airplane model is $210
Future value is $1,410,000 in 2016
Step 2
a)
Calculation of annual percentage increase in price:
Excel workings:
Step 3
Excel spreadsheet:
Therefore, percentage increase in price per year is 7.55%
Step by step
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