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amm1812
3 years ago
8

You have inherited land that was purchased for $25,000 in 1970. The value of the land has appreciated by

Mathematics
1 answer:
Darina [25.2K]3 years ago
5 0

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.)

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