Question

during a 10-year period of constant inflation, the value of a $600,000 property will increase according to the equation v=600,000e^0.07t

^{a. The value of the property in 3 years will be $____________}

^{b. This property will be worth double its original value in ______ years.}

Answer 1

a) The value of the property in 3 years = 600,000e^0.07t

                                                              = 600,000e^0.07(3)

                                                              = $740,206.84

The value of the property in 3 years will be $740,206.84.

b) This property will be worth double its original value means the value will be $1,200,000

600,000e^0.07t = 1,200,000

e^0.07t = 1,200,000 / 600,000 = 2

ln e^0.07t = ln (2)

0.07t = 0.7

t = 0.7/ 0.07 = 10 years

This property will be worth double its original value in 10 years.