Answer:
Future value of land = 25,000[1.04]³⁰
Future value of land = $81,084 (Approx.)
Step-by-step explanation:
Given:
Purchase cost of land in 1970 = $25,000
Application rate = 4% per year
Find:
Price of land in 2000
Computation:
Number of year = 2000 - 1970 = 30 year
Future value of land = [Purchase cost of land][1+Application rate]ⁿ
F = P[1+r]ⁿ
Future value of land = 25,000[1+4%]³⁰
Future value of land = 25,000[1+0.04]³⁰
Future value of land = 25,000[1.04]³⁰
Future value of land = 25,000[3.24339]
Future value of land = 81,084.75
Future value of land = $81,084 (Approx.)
