Unit 6 - Kaplan University | KU Campus

5. How much would the same coin be worth after 5 years if the appreciation rate averages
13%? Assume that the appreciation would be compounded annually and use the Future
Value Formula for Simple Interest.
FV = P(1 + R)^N, where FV is the future value, P is the present value, R is the annual
appreciation rate, and N is the number of years.
FV = 1,650(1 + 0.13)^5 = 1,650(1.13)^5 = $3,040.02
6. What would a gold Krugerrand coin be worth in one year if its current value is $1,500 and
it appreciates at 11% over the year?
FV = P(1 + R), where FV is the future value, P is the present value, and R is the annual
appreciation rate.
FV = 1,500(1 + 0.11) = 1,500(1.11) = $1,665.00
7. What would the value of the same gold Krugerrand coin be after 10 years if the average
annual appreciation rate is 11%?
FV = P(1 + R)^N, where FV is the future value, P is the present value, R is the annual
appreciation rate, and N is the number of years.
FV = 1,500(1 + 0.11)^10 = 1,500(1.11)^10 = $4,259.13.
8. How much has an American Gold Eagle coin appreciated based upon its original value of
$10 and its current value of $1,600?
FV = P(1 + R), where FV is the current value, P is the original value, and R is the amount of
appreciation.
1,600 = 10(1 + R)
1,600/10 = 1 + R
160 = 1 + R
R = 159 = 159 x 100% = 15,900%
9. If a 1922 gold certificate is currently worth $84,000 and it increases at a rate of 17½%,
how much will it be worth next year?
FV = P(1 + R), where FV is the future value, P is the present value, and R is the annual
appreciation rate.