A house was valued at $115,000 in the year 1993. The value appreciated to $155,000 by the year 2002.

Question

A) If the value is growing exponentially, what was the annual growth rate between 1993 and 2002?

r =   Round the growth rate to 4 decimal places.

B) What is the correct answer to part A written in percentage form?

r =   %.

C) Assume that the house value continues to grow by the same percentage. What will the value equal in the year 2006 ?

value = $  Round to the nearest thousand dollars.

Answer 1

155,000 = 115,000e^(2002-1993)r

155/115= e^9r

ln(31/23)= 9r

r= ln(31/23)/9=about 0.033166

= about 3.3317 % interest rate

in 2006, another 4 years

A=155000e^4(.0331666)= 155000e^.132666= $176,989.74