Question

Tom bought his fiancée Marie a 3800 diamond engagement ring Marie discovers that the value of the ring appreciates 4% each year what is the value of the ring after 4 years

Answer 1

Value of ring after four years with appreciation of 4 % each year is 4445.46

Solution:

Given that

Tom bought his fiancée Marie a 3800 diamond engagement ring

Marie discovers that the value of the ring appreciates 4% each year

Need to determine value of ring after four years

Initial value of the ring = 3800

Appreciation of 4% in value means 4% increase

After 1 years , value increases by 4% which means

Value after 1 year = Initial value of the ring + 4% of Initial value of the ring

`\begin{array}{l}{=3800+4 \% \text { of } 3800} \\\\ {=3800+(4)/(100) * 3800=3952}\end{array}`

After 2 years, value increases by 4% of Value after 1 year which means

Value after 2 years = Value after 1 year + 4% of Value after 1 year

`\begin{array}{l}{=3952+4 \% \text { of } 3952} \\\\ {=3952+(4)/(100) * 3952=4110.08}\end{array}`

After 3 years, value increases by 4% of Value after 2 years which means

Value after 3 years = Value after 2 years + 4% of Value after 2 years

`\begin{array}{l}{=4110.08+4 \% \text { of } 410.08} \\\\ {=4110.08+(4)/(100) * 4110.08=4274.4832}\end{array}`

After 4 years , value increases by 4% of Value after 1 year which means

Value after 4 years = Value after 3 years + 4% of Value after 3 years

`\begin{array}{l}{=4274.4832+4 \% \text { of } 4274.4832} \\\\ {=4274.4832+(4)/(100) * 4274.4832=4,445.46}\end{array}`

Value of ring after four years with appreciation of 4 % each year is 4445.46