Question

Property value suppose that the value of a piece of property doubles every 12 years. If you buy the property for $55,000, its value t years after the date of purchase should be

V(t) = 55,000(2)t/12.
Use the model to approximate the value of the property (a) 4 years and (b) 25 years after it is purchase.

Answer 1

Answer: a) $69,295.60

b) $233,028.03

Explanation:

Given : Property value suppose that the value of a piece of property doubles every 12 years.

If you buy the property for $55,000, its value t years after the date of purchase should be
`V(t) = 55,000(2)^(t/12)`

a) At t= 4 years , we get

`V(4) = 55,000(2)^(4/12)`

`V(4) = 55,000(2)^(1/3)`

`V(4) = 55,000(1.25992)=69295.6`

Hence, the value of the property after 4 years = $69,295.60

b) At t= 25 years

`V(25) = 55,000(2)^(25/12)`

`V(25) = 55,000(2)^(2.083)`

`V(25) = 55,000(4.236873338)=233028.03359\approx233,028.03`

Hence, the approximate the value of the property after 5 years = $233,028.03