I'm stuck on this homework problem. Any help would be greatly appreciated!
In 1985, the first U.S. Open Golf Championship was held. The winner's prize money was $150. In 2006, the winner's check was $1,170,000. What was the percentage increase in the winner's check over this period? If the winner's prize increases at the same rate, what will it be in 2040?
We need to calculate the annual growth rate. The initial amount is $150, final amount is $1,170,000 and the time period is 21 years (1985 to 2006).
We use the compound interest formula to ...
The solution explains how to calculate the rate of growth and use that to forecast the amount in future.