Question

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?

Answer 1

the value of the land after 11 years will be $2,903,175.

Answer 2

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