Question

Bob bought some land costing $15,540. Today, that same land is valued at $45,117. How long has Bob owned this land if the price of land has been increasing at 5 percent per year

Answer 1

21.84 years

Explanation:

From the compound interest formula;

F = P(1+r)^t .......1

ln(F/P) = tln(1+r)

t = ln(F/P)/ln(1+r) .......2

Where;

F = Final value = $45,117

P = Initial value = $15,540

r = rate = 5% = 0.05

t = time

Substituting the values into equation 2;

t = ln(45117/15540)/ln(1.05)

t = 21.84542292124 years

t = 21.84 years

It will take Bob 21.84 years