Question

The common ratio for the home prices in an Austin neighborhood is 1.08 every year for the past 5 years increasing or decreasing? and is it linear or exponential? therefore interpret the change?

Answer 1

Lindsey, this is the solution:

Ratio for the home prices in an Austin neighborhood = 1.08 every year

1. It is an increasing ratio because it is higher than 1.

2. It is linear because the rate of change is constant (1.08)

3. Interpretation : The common ratio means that every year for the past 5 years the home prices in the Austin neighborhood grew 8%.