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.