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A house cost $185,500 in 2000. By the year 2015 the value was $132,000. What was the growth rate as a percentage for that 15-year period. (Remember, i=(P1/P1) 1/n-1)

A house cost 185500 in 2000 By the year 2015 the value was 132000 What was the growth rate as a percentage for that 15year period Remember iP1P1 1n1 class=

Respuesta :

Let's begin by listing out the information given to us:

Cost, Year 2000 (Old price) = $185,500

Cost, Year 2015 (New price) = $132,000

Year difference = 15 years

The growth rate is calculated as:

[tex]\begin{gathered} i=(\frac{p_2}{p_1})^{\frac{1}{n}}-1 \\ i=(\frac{132000}{185500})^{\frac{1}{15}}-1 \\ i=0.97757-1=-0.0224 \\ i=-0.0224\cdot100\text{\%}=-2.24\text{\%} \\ i=-2.24\text{\%} \end{gathered}[/tex]