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The Freeman family bought a new apartment five years ago for $80,000. The house is now worth $199,200. Assuming a steady rate of growth, what was the yearly rate of appreciation?

Respuesta :

Aliwohaish12
199200=80000(1+r)^5
Solve for r
r=((199,200÷80,000)^(1÷5)−1)×100
r=20 %

Answer:

Rate of yearly appreciation of the house is 20%

Step-by-step explanation:

The Freeman family bought a new apartment 5 years ago for $80000.

The house worth now $199200.

We have to calculate the yearly rate of appreciation.

To get the rate of appreciation we will use the formula

P = [tex]P_{0}(1+r)^{t}[/tex]

P = current worth

[tex]P_{0}[/tex] = Worth before time t years

r = rate of appreciation

t = duration

Now we put the values in the formula

[tex]199200=80000(1+r)^{5}[/tex]

[tex](1+r)^{5}=\frac{199200}{80000}=2.49[/tex]

[tex](1+r)=2.49^{\frac{1}{5}}[/tex]

(1 + r) = 1.20

r = 1.20 - 1

r = 0.20

Or rate of yearly appreciation of the house is 20%

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