Stan's parents bought their house in 1969 for $40,000. They sold it in 2010 for $750,000
Write the equation of the function that describes this situation.
PV=Present value
FV=Future value
R =Interest rate
N =Number of years
FV =PV x R^N
750,000 =40,000 x R^41. [2010 - 1969 =41 years they had the house].
18.75 = R^41 take the 41st root of both sides to find the rate of growth over 41 years.
R =18.75^(1/41)
R=1.0741 - 1 x 100
R =7.41% - Average rate of growth in the value of the house over 41 years.
