Suppose the first comic book of a classic series was sold in 1954. In 2015, the

Question

Suppose the first comic book of a classic series was sold in 1954. In 2015, the estimated price for this comic book in good condition was about $310,000. This represented a return of 22 percent per year. For this to be true, what was the original price of the comic book in 1954?

Suppose the first comic book of a classic series was sold in 1954. In 2015, the estimated price for this comic book in good condition was about $310,000. This represented a return of 22 percent per year. For this to be true, what was the original price of the comic book in 1954?

Explanation / Answer

This requires application of basic time value of money function: FV = PV * (1 + r)n

n = 2015 - 1954 = 61

$310,000 = PV * (1 + 22%)61

$310,000 = PV * 185,331.68

PV = $1.67 ----> Answer (Option 4)

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