Question

Assume that in January 2017, the average house price in a particular area was $279,400. In January 2002, the average price was $196,300. What was the annual increase in selling price? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

2.38%

Explanation:

In January 2017 the average house price in an area was $279,400

In January 2002 the average house price was $196,300

Therefore the annual increase in selling price can be calculated as follows

t = 15

= ($279,400/$196,300)^1/15 -1

= 1.42333^0.06666 -1

= 1.02378 -1

= 0.02378 ×100

= 2.38%

Hence the annual increase in selling price is 2.38%