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11-144.

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 $A = P\left(1 + r\right)^{n}$ 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.