Question

The Mendes family bought a new house 8 years ago for $126,000. The house is now worth $156,000. 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

The formula is
A=p (1+r)^t
A future value 156000
P present value 126000
R rate of appreciation?
T time 8 years
Solve the formula for r
R=(A/p)^(1/t)-1
R=(156,000÷126,000)^(1÷8)−1
R=0.027×100
R=2.7%