Question

The value of a Van Gogh painting increases by 7.3% each year. If it was valued at $94,000 in 1952, what will be its estimated worth in 2020?

Answer 1

$11,321,630

Explanation:

We solve using Exponential growth formula

A(t) = Ao (1 + r)^t

Ao = Initial worth = $94,000

r = Growth rate = 7.3% = 0.073

t = Time in years = 2020 - 1952

= 68 years

A(t) = Current worth in 2020 = After 68 years

A(t) = 94000 × ( 1 + 0.073)^68

A(t) = 94000 × 120.44286946

A(t) = 11,321,629.729

Therefore, the estimated worth of the Van Gogh painting in 2020 approximately = $11,321,630