Question

Bryan purchased a Corvette in 1968 for $4,600. In 2018, the Corvette now has and appraised valued of $57, 500. Given that the annual percentage rate has been constant, what is the annual rate of growth?
A) 5.18% B) 5.25% C) 6.25% D) 6.52%

Answer 1

Answer:

A) 5.18%

Step-by-step explanation:

$4600*(1+r)^{50}=57500\\r=5.18%$

Answer 2

5.18%
To calculate the appreciated value, first add 1 to the appreciation rate, expressed as a decimal. As an example, for an 5.18 percent annual appreciation rate, add 1 to 0.0518 to get 1.0518

Raise the result to the nth value, where "n" is the number of projected years. In the example, to calculate the appreciated value fifty years in the future, raise 1.0518 to the 50th power -- multiply 1.0518 by itself fifty times. The result for this example is 12.4927579031

Multiply this figure by the current value of the asset to calculate its appreciated value. 

12.4927579031 * 4600 = 57,466.686354112 (off a little because of rounding)