Answer:
The interest rate is 7.5%
Step-by-step explanation:
The winner’s prize was in 1893 = $230
Now the winner prize in 2015 = $1570000
Total time period = 2015 – 1893 = 122 years
We have given the initial prize and final price along with the time period of 122 years. Now interest rate is required to calculate.
Future value = present value (1 + r)^n
1570000 = 230 (1 + r)^122
r = 0.075 or 7.5 %
The interest rate is 7.5%
