The Mendes family bought a new house 11 years ago for $100,000. The house is now worth $196,000. Assuming a steady rate of growth, what was the yearly rate of appreciation?

Question

I'm not sure how to set this problem up at all. Please help :(

Answer 1

100000(1+i)^11 = 196000
(1+i)^11 = 1.96
take 11th root of both sides

1+i = 1.96^(1/11) = 1.06309
i = .06309
or
appr 6.3%

check:
100000(1.06309)^11 = 196006 , not bad