The average price of an antique car

Hey lheiannie07,

My first step here would be to write out what I know on my scratch paper:

1990: $11,500
+13%
1996: ?
+20%
2001: ?

We want to solve for the price in 2001. We know how much the car cost in 1990, so let's start there. From 1990 to 1996, the price increased 13%. This means that the price in 1996 is 113% of the price in 1990. Converting that into a decimal, we get that price in 1996 = 1.13(price in 1990) or price in 1996 = 1.13($11,500). Solving that gives $12,995. We can fill that in on our scratch paper:

1990: $11,500
+13%
1996: $12,995
+20%
2001: ?

Now we can use the price in 1996 to find the price in 2001. From 1996 to 2001, the price increased 20%. This means that the price in 2001 is 120% of the price in 1996. Again, converting that into a decimal, we get that price in 2001 = 1.2(price in 1996) or price in 2001 = 1.2($12,995). Solving that gives $15,594. So the price of the car in 2001 is $15,594, making A the correct answer.