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.

Guest Apr 4, 2017

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.

Guest Apr 4, 2017

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