Question

According to the Census Bureau, in October 2016, the average house price in the United States was $28,658. 6 years earlier, the average price was $21,608. What was the annual increase in the price of the average house sold

Answer 1

4.7%

Step-by-step explanation:

Calculation for the annual increase in the price of the average house sold

Using this formula

A=P(1+r/100)^n

R = (FV / PV)1/6– 1

where,

A represent future value

P represent present value

r represent rate of interest

n represent time period.

Let plug in the formula

$28,458=$21,608*(1+r/100)^6

($28,458/$21,608)^(1/6)=(1+r/100)

(1+r/100)=1.04696

r=1.04696-1

=4.7% Approximately

Therefore the annual increase in the price of the average house sold will be 4.7%