Question

A house was valued at $110,000 in the year 1985. The value appreciated to $145,000 by the year 2005.

-What was the annual growth rate between 1985 and 2005? Assume that the house value continues to grow by the same percentage.
-What did the value equal in the year 2010?

Answer 1

let 1985 <---> t = 0
then 2005 --> t = 20
2010 -----> t = 25

let the rate of appreciation be i (just like interest rate with money)

110000(1+i)^20 = 145000
(1+i)^20 = 1.3181818..
take 20th root
1+i = 1.013909
i = .0139 or appr 1.39 % (that's lousy)

value in 2010
= 110000(1.013909)^25
= $155,368

Answer 2

What do you have too do with the 20 root