Question

A house cost $185,500 in 2000. By the year 2015 the value was $132,000. What was the growth rate as a percentage for that 15-year period. (Remember, i=(P1/P1) 1/n-1)

Answer 1

Let's begin by listing out the information given to us:

Cost, Year 2000 (Old price) = $185,500

Cost, Year 2015 (New price) = $132,000

Year difference = 15 years

The growth rate is calculated as:

`\begin{gathered} i=((p_2)/(p_1))^{(1)/(n)}-1 \\ i=((132000)/(185500))^{(1)/(15)}-1 \\ i=0.97757-1=-0.0224 \\ i=-0.0224\cdot100\text{\%}=-2.24\text{\%} \\ i=-2.24\text{\%} \end{gathered}`