Build an Eight-Piece 20th Century Gold Set(con't)

Now let's assume the collector wants to keep his set and sell it 50 years from now. Let's also assume that the average annual rate of return will remain approximately the same for each graded set for the next 50 years. What will each set be worth?

MS-60 set: (1.0543)⁵⁰ = 14.0673
$3,550 x 14.0673 = $49,939

MS-63 set: (1.0693)⁵⁰ = 28.508
$10,000 x 28.5088 = $285,088

One can clearly see that the MS-63, set which compounds at a higher rate gives the collector a higher value in nominal dollars 50 years from now, everything else being equal.
The bottom line, as I see it, is that collectors need to learn how to use the given arithmetic to see what their annual rate of return has been for sets or diverse coins and then to use the given arithmetic to see what a set of coins could be worth in future years. Who knows, perhaps the coins your children will inherit from you will make them financially well off.
If one keeps the MS-63 type set for 75 years instead of the 50 years, this set could be worth $1,522,190!

(1.0693)⁷⁵ = 152.219
$10,000 x 152.219 = $1,522,190

The data show that compounding is the "8th wonder of the world".
The mathematics of compounding excited Warren Buffett in his earliest years. He would memorize compounding annuity tables to help him calculate the merits of his investments and also to keep his personal portfolio on a straight track. As we have seen in the coin appreciation calculations, time has a tremendous effect on wealth accumulation. The longer that assets can compound, the larger their value will be. Adding a few extra percentage points per year can have unfathomable consequences on wealth building. We see this with the two gold type sets in this article that have compounded at 5.43 percent and 6.93 percent per year.
Let me give another example that proves this point. The American Indians sold Manhattan for $24 in 1626. If they wanted to buy it back today, it would cost them more than $3.28 trillion. The $3.28 trillion is what $24 is worth in 379 years at 7 percent compounded annually.
However, getting back to coins, numismatic appreciation depends on popularity and even the rarest coin eventually reaches a maximum value in constant dollars, i.e., adjusted for inflation. In reality, the future coin values determined by the given math, at best, are only approximations. No one knows for sure what the future will bring. Nevertheless, one needs the mathematical tools and know-how to see what the potential value of an asset extended out X number of years could be, at a certain average annual rate of return. Now you can do it, too.