Question

The mendes family bought a new house 11 years ago for $113,000. the house is now worth $151,000. assuming a steady rate of growth, what was the yearly rate of appreciation? round your answer to the nearest tenth of a percent (1.2% etc)

Answer 1

An equation is:
151,000 = 113,000 * ( 1 + p )^11
( 1 + p )^11 = 151,000 : 113,000
( 1 + p )^11 = 1.336283
1 + p =
`\sqrt[11]{1.336283}`
1 + p = 1.0267
p = 1.0267 - 1
p = 0.0267 = 2.67% ≈ 2.7 %
Answer: The yearly rate of appreciation is 2.7 %.