Question

In 1963. Conrad Aguilar bought a 250 GT Lusso Ferrari for $12.900. After his death in 2010, it was sold for $300,000. In 2016, the same car sold at auction for $2,090,000. What APR did the car earn for the Aguilar estate in 2010? What APR did the car earn from its original sale udtil 2016? 5.7296 and 8.69% 7% and 10% 9.19% and 6.60% 6.60% and 8.80% 6.929 and 10.08%

Answer 1

$Future\, value=Present\, value\times \left ( 1+i \right )^{n}$

APR til 2010 is calculated below:

$300,000=12,900\times \left ( 1+i \right )^{2010-1963}$

$\frac{300,000}{12,900}= \left ( 1+i \right )^{47}$

23.255813957 =(1+)

$1.0692= \left ( 1+i \right )$

Interest rate is 6.92%.

APR till 2016 is calculated below:

$2,090,000=12,900\times \left ( 1+i \right )^{2016-1963}$

$162.0155= \left ( 1+i \right )^{53}$

$162.0155^{\frac{1}{53}}= \left ( 1+i \right )$

$1.1008= \left ( 1+i \right )$

Interest rate is 10.08%.

The correct option is e.