77.0k views
3 votes
You pay $300 for an antique lamp. The lamp is expected to appreciate every of about 8% annually At this rate, how long will it take for the value of the lamb to double

User Revital
by
3.3k points

1 Answer

3 votes

Answer: it will take 9 years for the value of the lamb to double.

Explanation:

The growth rate is exponential. We would apply the formula for exponential growth which is expressed as

y = b(1 + r)^ t

Where

y represents the value of the lamb after t years.

t represents the number of years.

b represents the initial value of the lamb.

r represents rate of growth.

From the information given,

b = $300

y = 2 × 300 = $600

r = 8% = 8/100 = 0.08

Therefore

600 = 300(1 + 0.08)^t

600/300 = (1.08)^t

2 = (1.08)^t

Taking log of both sides to base 10

Log 2 = log1.08^t = tlog1.08

0.3010 = t × 0.0334

t = 0.3010/0.0334

t = 9 years

User Joel Cornett
by
3.3k points