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A house cost $320,000 in 2005. By the year 2019, its value was $560,000. What was the growth rate as a percent for that 14-year period? (Remember, i=(p^2/p^1)^1n−1

Answer :

Answer:

Growth rate = 4.08%

Step-by-step explanation:

Rate of interest 'i' for the growth in the cost of the house,

i = [tex](\frac{\text{Final amount}}{\text{Initial amount}})^{\frac{1}{n}}-1[/tex]

Here 'n' = Duration or time (in years)

i = [tex](\frac{560000}{320000})^{\frac{1}{14}}-1[/tex]

i = [tex](\frac{7}{4})^{\frac{1}{14}}-1[/tex]

i = 1.0408 - 1

i = 0.0408

i = 4.08%

Therefore, growth rate for this period is 4.08%.

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