Sale Transaction Essay

Scholarly histories narrate of a sale dealing between the early 17Thursdaycentury Dutch colonists in Manhattan ( Island Manhattes so ) and the Indians busying the island. In the article written by Francis ( n. d. ) . the sale dealing took topographic point in August 10. 1626 ( 381 old ages ago ) . and amounted to 60 guldens ( E. B. O’Callaghan. erectile dysfunction. 1856 Documents Relative to the Colonial History of the State of New York. Albany. Vol. 1. p. 37. as reported in Francis. n. d. ) . The payment was really in beads and bangles but was assumed to amount to 60 guldens. An article inThe Straight Dopeand a paper presentation of Banner ( 2001 ) estimated 60 guldens to be around $ 24 based on the time’s currency exchange rate.

The inquiry is to calculate how much that money is deserving today had that sum been deposited in a Savingss and Loan organisation. and earned 5 % rate compounded quarterly.

Compound involvement expression:Meter=Phosphorus( 1 +I) ^N

whereMeteris the concluding sum including the principal (unknown) .Phosphorusis the chief sum ( $ 24 ) .Iis the rate of involvement per twelvemonth ( 5 % ) . andNis the figure of old ages invested ( 381 ) . Since the involvement is to be compounded quarterly.Iwill be changed to 1. 25 % ( per one-fourth ) . andNwill be changed to 1. 524 ( quarters in 381 old ages ) . Hence.

Meter=Phosphorus( 1 +I) ^N

= $ 24 ( 1 + 1. 25 % ) ^ 1. 524.

=$ 4. 001. 656. 783. 35à the present sum of $ 24 in 1626 given the above conditions.

If the same sum of money will be deposited continuously in the same sum of clip ( i. e. . present + 381 old ages or 1. 524 more quarters – this is the twelvemonth 2388 ) . the new given would be:

ALSO READ  CIPD Profession Map Essay

Meter=Phosphorus( 1 +I) ^N

= $ 24 ( 1 + 1. 25 % ) ^ 3. 048.

=$667. 219. 042. 156. 319. 000. 00à the twelvemonth 2388 sum of $ 24 in 1626 given the above.

Mentions:

Banner. S. 2001.Manhattan for $ 24: American Indian Land Gross saless. 1607-1763( Paper presentation at the John M. Olin Center for Law & A ; Economics. The University of Michigan ) . hypertext transfer protocol: //www. jurisprudence. umich. edu/CentersAndPrograms/olin/papers/Fall % 202001/banner. PDF. Date accessed: September 24. 2007.

Francis. P. . n. vitamin D.Beadss and Manhattan.hypertext transfer protocol: //www. hartford-hwp. com/archives/41/415. hypertext markup language. Date accessed: September 24. 2007.

Personal Finance Advice. 2006.Compound Interest. Manhattan & A ; the Indians.hypertext transfer protocol: //www. pfadvice. com/2006/01/15/ compound-interest-manhattan-the-indians/ . Date accessed: September 24. 2007.