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A house cost $320,000 in 2005. By the year 2019, it’s value was $560,00. What was the growth rate as a percentage for that 14 year period? Remember i=(P1/P2)1/n-1)

A house cost 320000 in 2005 By the year 2019 its value was 56000 What was the growth rate as a percentage for that 14 year period Remember iP1P21n1 class=

Respuesta :

[tex]i=(\frac{P2}{P1})^{\frac{1}{n}}-1[/tex]

You use the given formula with data:

P1: $320,000

P2: $560,000

n: 14 years

You calculare the rate i:

[tex]\begin{gathered} i=(\frac{560000}{320000})^{\frac{1}{14}}-1 \\ \\ i=1.75^{\frac{1}{14}}-1 \\ \\ i=1.04078-1 \\ \\ i=0.04078 \end{gathered}[/tex]

Turn into percent by multiplying by 100:

[tex]i=0.04078\cdot100=4.078[/tex]

Then, the growth rate as a percentage for that 14 years period is 4.078%

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