Tamara purchased a building for $114,750. The land appreciates about 2.3% each year. What is the value of the land after 11 years?

Question

asked Oct 26, 2019 33.5k views

2 Answers

Gucal · Answer 1 · 2019-10-30T08:52:50+0000

Answer: $147,361.71

Explanation:

The exponential growth function is given by :-

y=A(1+r)^x , where A is the initial value , r is the rate of growth and x is the time period.

Given : Tamara purchased a building for $114,750. The land appreciates about 2.3% each year.

i.e. A = $114,750 and r = 2.3%=0.023

Put The value of A and r in the above function, we get

y=114750(1.023)^x

Now, the value of the land after 11 years is given by :-

$y=114750(1.023)^(11)=114750*1.28419794565\\\\=147361.714263\approx147361.71$

Hence, the value of the land after 11 years = $147,361.71