Question

A farm increases in value from $800,000 to $1,100,000 over a period of 6 years. Use the formula r=(F/P)^1/n−1 to find the annual inflation rate r to the nearest tenth of a percent, where n is the number of years during which the value increases from P to F.
A farm increases in value from $800,000 to $1,100,000 over a period of 6 years. Use the formula r=(FP)1/n−1 to find the annual inflation rate r to the nearest tenth of a percent, where n is the number of years during which the value increases from P to F.

Answer 1

Answer:

Step-by-step explanation:

The formula representing the the annual inflation rate r is expressed as

r = (F/P)1/n−1

Where

n represents the the number of years during which the value increases from P to F

A farm increases in value from $800,000 to $1,100,000 over a period of 6 years. This means that

P = $800,000

F = $1,100,000

n = 6

Therefore,

r = (1100000/800000)1/6−1

r = 1.375/5 = 0.275