I Need Help On This Math ASAP!! It Is Due Today Before Midnight?

One day, a man looking something like a famous entertainer from the 1970s, enters The 7th Inning’s memorabilia department and begins examining the items in the showroom. Charlie, intrigued by the stranger’s appearance, greets him and asks him if he is interested in anything in particular. The stranger is particularly interested in Elvis memorabilia. Now, Charlie is a lifelong fan of Elvis, and has actually met and talked with Elvis on many occasions. He enjoys collecting, displaying, and talking about Elvis merchandise with other fans and collectors. It is amazing, but Elvis gear does appreciate at a pretty consistent rate, and the supply of items is limited enough to withstand the ups and downs of the economy. There always seems to be enough money in the hands of collectors to continue to bid up items from year to year, especially any item that had a personal association with Elvis, like his clothes, jewelry, or other personal possessions. The stranger wants to know what he can expect in terms of a return on his investment, should he buy several of the items in the shop.

What you know:

Elvis memorabilia has increased by 10–30% each year on average in the past. Charlie thinks that the items will continue to increase at the following rates:

Item Current Value Expected increase

Key to Graceland and picture $750 10 – 15% increase

Christmas CD $150 10%

TCB necklace $10,000 30%

Mint-condition 1st Album $12,000 20%

Signed 45 rpm records $750 10%

Signed poster $3,500 15%

What you are looking for:

1. How much will items appreciate over time?

2. What factors affect appreciation?

3. Is investing in Elvis memorabilia a good investment?

Solution Plan:

1. If you were to place $15,000 in the bank at 3% interest, how much would you have in the bank after one year if the interest were compounded quarterly?

2. If you were to buy $15,000 of Elvis memorabilia and it appreciated by 20% per year, how much would the memorabilia be worth at the end of one year?

3. Which investment carries a higher risk of losing money? What factors could cause the value of Elvis memorabilia to depreciate instead of appreciate?

4. If the key to Graceland costs $750 today and appreciates in value by 15% in one year, what will it be worth one year from today?

5. How much would the same key be worth after 5 years if the appreciation rate averages 15%? Assume that the appreciation would be compounded annually and use the Future Value Formula for Simple Interest.

6. What would the Christmas CD be worth in one year based if its current value is $150 and it appreciates at 10% over the year?

7. What would the value of the same CD be after 7 years if the average annual appreciation rate is 10%?

8. How much has the original Elvis album appreciated based upon its original value of $5 and its current value of $12,000?

9. If the signed 45s are currently worth $750 and they actually increase at a faster rate of 12½%, how much will one record be worth next year?

10. Charlie originally wanted $15,500 for the album, movie poster, and a 45 record. He agreed to sell them for $14,500. Why would he agree to lower his price by $1,000?

11. If the price paid for the three items increases in value at an overall rate of 18% next year, what will this investment be worth next year?

12. Do you think that investing in Elvis is a good investment? Why or why not?

2 Answers

  • Anonymous
    8 years ago
    Favorite Answer

    1. $15,000(1 + .03/4)^($4(1)

    = $15,455.09

    (see better explanation of this formula in #5 answer)

    2. ($15,000 * .20) + 15,000 = $18,000

    3. Comparatively, the Elvis memorabilia is much risker on the basis of returns given. It also depends on the product you're holding at the bank. If it's a Certificate of Deposit (CD) or bond, which seems to fall in line with the rates being offered by the banks, the bank position would be riskier depending on the rating of the debt. But, if the products are in good rating, the Elvis memorabilia would be riskier. If Elvis were to come back to life, the value would definitely depreciate.

    4. $750(1.15) = $862.50

    5. (Same formula for #1)

    P(1 + r/n)^nt

    P = principal amount (the initial amount you borrow or deposit)

    r = annual rate of interest (as a decimal)

    t = number of years the amount is deposited or borrowed for.

    A = amount of money accumulated after n years, including interest.

    n = number of times the interest is compounded per year

    = $750(1 + .15/1)^(1)(5)

    = $1,508.52

    6. $150(1.10) = $165

    7. $150(1 + .1/1)^(1)(7) = $292.31

    8. $12,000/$5 = 2,400%

    9. $750(1.125) = $843.75

    10. The value of the items depreciated, i.e. the demand for these went down so Charlie had to take what the market gave him for the items.

    11. Assuming they're using the price paid by Charlie's client, it would be: $14,500(1.18) = $17,110

    12. You're words.

  • 4 years ago

    In one way, sure present day society could be criticized for being materialistic and in a different sense, no. When you've observed, songwriters now sing about two major matters: intercourse and cash. If it's now not that, it can be ladies. What does money do? It buys you anything you desire to possess in case you have ample of it. Youngsters of younger a long time are being given things that some young adults don't possess (phones, clothier garments, Ipod, and many others). Firms are normally coming out with new gadgets to promote although the USA is in a recession. However this would go beneath the category of commercialism adversarial to materialistic. To bring this collectively, it might be said that some individuals price cash and materials more than individuals. Many would kill (literally) for cash, cars and valuable items. However, in a piece of writing I read, it used to be acknowledged that now these days (with the recession), it's more of an act of showing off to stroll around with baggage from Macy's and other excessive finish department retailers (after looking there). But this is only one fact to protect the opinion that state-of-the-art society just isn't criticized. I might without doubt advise you to search out more examples and articles on the us and other nations' materialistic approaches. You'll be able to be in a position to go extra in-depth with this file when you've got time. Subsequent time i wouldn't endorse ready so late to as this is an pleasant subject to research and can be long past into widely if given the time and study. Talk to an grownup or teacher (if you can e mail them in time) and ask for different ideas. Hope this helps.

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