Bradford T. answered • 05/08/23
MS in Electrical Engineering with 40+ years as an Engineer
I believe the problem is asking for an exponential function to fit the given data
A(t)=Pert
where t is the number of years from 2006 [0,4]
Then determine the value of r in percent which would be the appreciation in price.
Using an exponential least squares fit tool:
A(t)≈368549e0.0478t
Which would make the appreciation 4.78% for house prices.
If you fit the sales data to an exponential function, you will get a depreciation.
Bradford T.
If you fit it to A(t)=Ao(1+r)^t instead, you get A(t)=351339(1+0.0478)^t, which still makes r =4.78%.05/11/23
Khushi S.
where did you get the 351339 and the 0.0478?05/11/23
Bradford T.
I derived a least squares curve fit to fit the data to Ao(1+r)^t, where I let t = 0,1,2,3 and 4.05/12/23
Khushi S.
is there a way to do it without deriving?05/12/23
Bradford T.
You could set up a system of non-linear equations and solving for Ao and r, but that would be a worse approximation than least squares fit. x1=Ao(1+r)^0 x2=Ao(1+r)^1 x2=Ao(1+r)^2 x3=Ao(1+r)^3 x4=Ao(1+r)^4 r ~= 0.05 or 5%05/12/23
Khushi S.
I didn't learn that formula yet, is there a way to do it with a formula like this A = Ao (1+r)^t/h Where A refers to the Final Amount Ao = original amount R = common ratio 1 = original investment r = common ratio t = time elapsed h = period that each occurrence takes place05/11/23