SOLUTION: In the year 1985, a house was valued at $116,000. By the year 2005, the value had appreciated exponentially to $155,000. What was the annual growth rate between 1985 and 2005? (Rou

Question 1077933: In the year 1985, a house was valued at $116,000. By the year 2005, the value had appreciated exponentially to $155,000. What was the annual growth rate between 1985 and 2005? (Round your answer to four decimal places.)
Assume that the value continued to grow by the same percentage. What was the value of the house in the year 2010? (Round your answer to the nearest dollar.)
Answer by jorel1380(3719) (Show Source): You can put this solution on YOUR website!
155/116=1.3362068965517241379310344827586
So:
(1+r)^30=1.3362068965517241379310344827586, where r is the rate of growth per year. So:
ln (1+r)^30=ln 1.3362068965517241379310344827586
30 ln (1+r)=0.28983492581288197451218738249028
ln(1+r)=0.00966116419376273248373957941634
1+r=e^0.00966116419376273248373957941634
r=0.00970798389669593985825390329544, or 0.970798389669% as the rate of equity growth.
2010=155000*(1.0097079838966959398582)^5=$162671.1922 as the value of the house in 2010. ☺☺☺☺
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