Suppose the current price of gold is $1,500 an ounce. Hotshot Consultants advise

Question

Suppose the current price of gold is $1,500 an ounce. Hotshot Consultants advises you that gold prices will increase at an average rate of 12% for the next two years. After that the growth rate will fall to a long-run trend of 3% per year. Assume that gold prices have a beta of 0 and that the risk-free rate is 5.5%. What is the price of 1 million ounces of gold produced in eight years?

This answer is just two of the numbers multiplied together but I am not sure what to mulitiply.  The solution given in Cheggs solution guide is incorrect (I used their numbers and got the answer wrong). My instructor says "This one is a lot easier than the direction you are headed which makes it somewhat of a trick question in a way.  The current price of gold represents the discounted value of expected future gold prices so all of that work is already done so you just really need to consider the price and the number of ounces to determine the future value and remember that you need to put the answer in terms of billions so if you keep it long, you need to shorten that."

Explanation / Answer

The price of $1500 per ounce represents the discounted value of expected future gold prices.

Hence, the present value of 1 million ounces produced 8 years from now should be: ($1500 x 1 million) = $1500 million

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