Question

A house cost $320,000 in 2005. By the year 2019, it’s value was $560,00. What was the growth rate as a percentage for that 14 year period? Remember i=(P1/P2)1/n-1)

Answer 1

`i=((P2)/(P1))^{(1)/(n)}-1`

You use the given formula with data:

P1: $320,000

P2: $560,000

n: 14 years

You calculare the rate i:

`\begin{gathered} i=((560000)/(320000))^{(1)/(14)}-1 \\ \\ i=1.75^{(1)/(14)}-1 \\ \\ i=1.04078-1 \\ \\ i=0.04078 \end{gathered}`

Turn into percent by multiplying by 100:

`i=0.04078\cdot100=4.078`

Then, the growth rate as a percentage for that 14 years period is 4.078%