How true is this?
Many people notice that a penny is (mostly) copper and they see copper prices rising rapidly. Is the Penny mostly made out of copper?
Material Composition of a Penny
Each year, the composition of the U.S. Penny could vary from time to time. For the most part, before 1982, the U.S. Penny weighs 3.1 grams, and is made out of 5% zinc and 95% copper. After 1982, the U.S. Penny weighs 2.5 grams, and is made out of 97.6% zinc and 2.4% copper.
Current Price of Zinc and Copper
Currently, as of April 24, 2008, using a Cash basis, the price of copper is $8.701/KG, and the price of zinc is $2.220/KG.
Calculating the Value of the Penny Based on Value of Material
Calculating the value of each, we find the value of each type of U.S. Penny:
- Pre-1982 Penny: 2.5968545 cents
- Post-1982 Penny: .593886 cents
Answer to our Initial Question
So is the U.S. Penny really worth more as a metal than as U.S. Currency? It depends on the edition of the U.S. Penny. For the most part, pre-1982 Pennies are worth 2.59 cents each! That exceeds the value of the U.S. Penny (1 cent) by more than 2 times!
However, if we look at the cost of the post-1982 U.S. Penny, the value of the metals is currently equivalent to .59 cents, currently less than 1 cent.
Is the Penny Obsolete?
But if we add the cost of producing the U.S. Penny, even the post 1982 edition of the Penny, the total cost (cost of producing plus price of the metals) could exceed the value of the coin itself (1 cent as US Legal Tender).
Many law makers have been proposing to make the U.S. Penny Obsolete because of this.
Melt a Penny and Sell the Material? That's Illegal
If you are having thoughts of melting a pre-1982 US Penny and selling the raw material, you have to know that there is a law against that.
- 1 KG = 1000 g
- Zinc = $2.220 / KG
- Copper = $8.701 / KG
- pre-1982 Penny: 3.1 grams, 5% zinc, 95% copper
- post-1982 Penny: 2.5 grams, 97.6% zinc, 2.4% copper
Pre-1982 Penny = (3.1g) (.05 zinc) (1 KG / 1000g) ($2.220 / KG) +
(3.1g) (.95 copper) (1 KG / 1000g) ($8.701 / KG)
= $.0003441 + $.025624445 = $.025968545
= 2.5968545 cents
Post-1982 Penny = (2.5g) (.976 zinc) (1 KG / 1000g) ($2.220 / KG) +
(2.5g) (.024 copper) (1 KG / 1000g) ($8.701 / KG)
= $.0054168 + $.00052206 = $.00593886
= .593886 cents