You have inherited land that was purchased for $30,000 in 1960. The value of the land increased by approximately 5% per year.

Question

What is the exponential growth/decay factor? (b value)

Answer 1

To determine the exponential growth factor (b value) for the land that has appreciated in value at a rate of 5% per year, we can use the formula for exponential growth:

\[ b = 1 + r \]

where \( r \) is the growth rate expressed as a decimal. In this case, the growth rate is 5%, or 0.05 in decimal form.

Calculating \( b \):

\[ b = 1 + 0.05 = 1.05 \]

Therefore, the exponential growth factor (b value) is 1.05.