In 2012 an Action Comics No 1 featuring the first appearance

In 2012, an Action Comics No. 1, featuring the first appearance of Superman, was sold at auction for $985,000. The comic book was originally sold in 1944 for $.05.

For this to have been true, what was the annual increase in the value of the comic book? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Solution

Future value = present value * (1+annual increase rate)^number of periods

number of periods = 2012 - 1944 = 68

Future value = 985000

present value = 0.05

=>

985000 = 0.05 * (1+ annual increase rate)^68

annual increase rate = 28.02%