SOLUTION: If the value of land in an area is increasing 9 percent a year, how long will it take for property values to double? and if its 5.5 percent and 2.75 what would be the answers?

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Question 782512: If the value of land in an area is increasing 9 percent a year, how long will it take for property values to double? and if its 5.5 percent and 2.75 what would be the answers?
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
If the value of land in an area is increasing 9 percent a year, how long will it take for property values to double? and if its 5.5 percent and 2.75 what would be the answers?
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Assuming the value is compounded you get:
A(t) = Ao*(1+(r/n))^(nt)
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Solve (1+(r/n))^(nt) = 2 for each of the rates
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For 9%::: (1+ 0.09)^t = 2
t = ln(2)/ln(1.09) = 8 years when rounded down.
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For5.5%:: (1 + 0.055/1)^(1*t) = 2
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1.055)^t = 2
t = ln(2)/ln(1.055) = 13 years when rounded up
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For 2.75%::(1.0275)^t = 2
t = ln(2)/ln(1.0275) = 26 years when rounded up
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Cheers,
Stan H.
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