Question

The value of a piece of land is $500 an acre. The price per acre is expected to increase 7% per year. Which function models the value of an acre after t years?

Answer 1

To set the equation,we can first find how much price would be raised within a year:

=500×(1+7%)

=500×1.07

As the years go by the increase would accumulate,and the equation would be:

$500 \times {1.07}^{t}$
Hope it helps!