Question 48008: My mind is fried and I am on my last problem for tonight but can't seem to figure out what I am doing wrong. Please help me solve this problem.
If a piece of real estate purchased for $75,000 in 1998 appreciates at the rate of 6% per year, then its value t years after the purchase will be
f(t)=75000(1.06^t). According to this model, by how much will the value of this piece of property increase between the years 2005 and 2008.
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! If a piece of real estate purchased for $75,000 in 1998 appreciates at the rate of 6% per year, then its value t years after the purchase will be
f(t)=75000(1.06^t). According to this model, by how much will the value of this piece of property increase between the years 2005 and 2008.
From 1998 to 2005 is 7 years, i.e. t=7
From 1998 to 2008 is 10 years, i.e. t=10
Value in 2008 is 75000(1.06)^10= $134313.58
Value in 2005 is 75000(1.06)^7 = $112772.27
The difference is $21541.31
Cheers,
Stan H.
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