Question

You have inherited land that was purchased for $40,000 in 1990. The value of the land

increased by
approximately 5% per year. Which relationship would represent the value of the land in the
year 2020

Answer 1

`A(30)=40000(1.05)^(30)`

Explanation:

Given that the land was purchased for $40,000 in 1990, the initial amount/principal =$40,000

Since its value increases by approximately 5% per year, we can model this growth using the compound interest formula:

`A=P(1+r)^n`

P=$40,000, r=5%=0.05, n=2020-1990=30 Years

Therefore, we have the value of the land in 30 years time to be:

`A=40000(1+0.05)^(30)\\A(30)=40000(1.05)^(30)`

Since the options are not available, the relationship which represents the value of the land in the year 2020 is:

`A(30)=40000(1.05)^(30)`