### Home > CCA2 > Chapter 11 > Lesson 11.2.2 > Problem11-58

11-58.

In the summer of $1994$, a couple was going through their attic and found a $\1000$ bond issued by the State of Nevada in $1865$. It read, “Pay to the Bearer” (whoever has possession). States issue bonds when they need to borrow money. In $1865$, Nevada was a new state and in great need of cash, so it issued this bond at an interest rate of $24\%$ compounded annually.

1. Do you think it would have been possible to cash in this bond?

How many years has it been since the bond was issued? Do you think the state could pay that much?

2. If $\1000$ were invested in $1865$ at an interest rate of $24\%$ compounded annually, how much would the investment be worth in $1994?$

Use to find the worth of the investment.

A $= 1{,}000$  $r = 0.24$  $n = 129$

The investment is worth about $1.126 · 10^{15}$.

3. What is the place value of the first digit in the answer to part (b)?

The first digit is in the quadrillion place.

4. Would the amount be significantly different if was compounded continuously instead?

$A ≈ 2.791 · 10^{16}$, or about $2.68 · 10^{16}$ dollars more.