What will Cousin Brucie’s classic car be worth after 15 years if it appreciates at 10% annually starting from $60,000?

To determine the future value of Cousin Brucie’s classic car after 15 years, given an annual appreciation rate of 10% starting from $60,000, we utilize the formula for compound interest, which is:

Future Value = Present Value × (1 + Rate)^Time.

In this case, the present value (the initial value of the car) is $60,000, the annual appreciation rate is 10% (or 0.10), and the time period is 15 years.

Plugging in the numbers:

Future Value = $60,000 × (1 + 0.10)^15.

Calculating (1 + 0.10)^15 gives us approximately 4.504. Therefore:

Future Value = $60,000 × 4.504 ≈ $270,240.

This amount falls within the range of $250,000 to $255,000, thus making it the correct choice.

The calculation shows how compounding works effectively over a significant time period, leading to a substantial increase in value. As a car appreciates rather than depreciates (as many vehicles do), understanding compound interest is crucial for forecasting future values in personal finance, especially for assets that may retain or grow