Question

Bob bought some land costing $16,390. today, that same land is valued at $46,817. How long has bob owned this land if the price of land has been increasing at 6 percent per year?

Answer 1

Bob has to own his land for 18 years if the price is increasing at the rate of 6% per year.

Given that land was bought by Bob for $16390, the price is increasing at the rate of 6%, price of land today is $46817.

We are required to find the time for which Bob need to own the land so that the price of the land is $46817 today.

Compounding means calculating amount on the principal and the amount added interest.

Rate of increasing the price of land be 6%.

Price when Bob bought the land=$16390.

Price of land today=$46817.

It is like compounding of interest and the sum is calculated as under:

S=P*$(1+r)^{n}$

In the above equation P is theamount at beginning,r is rate of increasing and n is the number of years.

46817=16390$(1+0.06)^{n}$

46817/16390=$(1.06)^{n}$

$(1.06)^{n}$=2.8564

$(1.06)^{n}$=$(1.06)^{18}$  (Approximately)

From both the sides we will get n=18.

Hence Bob has to own his land for 18 years if the price is increasing at the rate of 6% per year.

Learn more about compounding at brainly.com/question/2449900

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