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BartSMP [9]
3 years ago
15

a. If the value of land in an area is increasing 10.5 percent a year, how long will it take for property values to double? (Roun

d your answer to 1 decimal place.)
Business
1 answer:
wariber [46]3 years ago
3 0

Answer:

6.7 years

Explanation:

This question can be answered using Rule 70. It is a rule that it used to estimate how long it takes for an investment to double in value. In this case, the investment is land and the rate is 10.5%.

Formula for rule 70;

Time it takes for value to double = 70/rate

Time it takes for value to double = 70/10.5

Time = 6.6666

To the nearest 1 decimal place, it would take 6.7 years

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Answer:

Her Yearly Repayment will be approximately $5771

Explanation:

For an Amortized Loan, to calculate the payment amount per period, we use the formula:

A=[P(1+r)ⁿ]/[(1+r)ⁿ-1]

where A=Payment per period

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r= Interest rate per period

n= number of payments period

From the information provided,

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n=4 years

r=6%=0.06

Therefore Yearly Repayment Amount A=[Pr(1+r)ⁿ]/[(1+r)ⁿ-1]

=[20000X0.06(1+0.06)⁴]/[(1+0.06)⁴-1]

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=[1200X1.2625]/[1.2625-1]

=1515/0.2625

=$5771.43

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