a married couple, purchased their home in December 1989 for $89,000. The house was appraised in January 2008 for $325,000. What was the annual rate of appreciation on the home during this period?

- anonymous

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- amistre64

compounded yearly eh...

- amistre64

325 = 89(1+r)^t right?

- amistre64

3.652 = (1+r)^18 if im doing it right :)

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- anonymous

ok how do you get the r in the bracket...this is where I am confused

- amistre64

the r = rate of appreciation correct?
if we take the initial value, and apply the "interest" to it we get:
89 + 89(rate); which factors to:
89(1+ rate) the rate is compunded every year for a total of 18 years.
89(1+rate)^18 = 325

- anonymous

Is the t = 19?

- anonymous

yes the t=19

- amistre64

log(3.652) = log[(1+r)^18]
log(3.652) = 18 log(1+r)
3.652^(1/18) = 1+r
3.652^(1/18) -1 = r

- amistre64

dec 89 is basically jan 90

- amistre64

8+10 = 2008

- amistre64

I get about 7.5%

- anonymous

ok... well the answers that I have to choose from are:
6.69%
6.26%
6.87%
7.05%

- amistre64

im close then ;)

- amistre64

work it backwards to see what fits, thats what I do with multiple choices

- anonymous

If you use 19 then you get 7.05%

- anonymous

lol...yes...but I am trying to find out how to come up with that on a BAII Plus calculator. And log is not on this one

- amistre64

89(1.0705)^18
use the calculator on the computer.... programs, accessories, calculator usually

- anonymous

ok....we are only allowed to use our calculators in this exam, so I have to figure out how to do it on this one. Stupid Business Math! LOL

- amistre64

324.7407 if you use ^19 ;)

- amistre64

without a log button...you got exponent button?

- anonymous

yes

- amistre64

can you key in a random exponent? like 1/19?

- amistre64

[325/89]^(1/19) -1

- amistre64

0.070544965363919914409636326010341

- anonymous

I use the button on the calculator that has a radical sign with the x above the radical sign and a y under the radical sign
Type in 3.652 then that sign and then 19 =

- amistre64

1/19 not 19 :) way different value for that lol

- amistre64

ohh....radical sign, gotcha

- anonymous

wow...mind spinning....lol

- amistre64

the answers 7.05 ;) dont lose sight of that one lol

- anonymous

yes....thanks for coming up with the appropriate answer...but I am trying to find out how to punch in this formula. I am a math idiot.... wish I wasn't

- anonymous

OMG......figured it out....yipee.
Sooooo love you guys!!!

- amistre64

take a pic of the calculator and post it :)

- amistre64

or not lol :)

- amistre64

yay!!! youre welcome :)

- anonymous

ok....will do

- anonymous

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- amistre64

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- anonymous

wish I knew how to use this dang thing....or that I knew how to do math

- amistre64

your math might be fine, that calculator looks mean tho lol

- anonymous

it is....we are all used to a regular scientific one. So we don't know how to use all the buttons that would probably make it much simpiler

- amistre64

heres my other one ;)

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- amistre64

it didnt post..... how odd

- amistre64

try it again

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- anonymous

NOW THAT'S MY KIND OF CALCULATOR! Bahahahaha

- amistre64

:) LOL

- anonymous

well you ARE now my Superhero!! Thanks so much. And I will definitely be back, I assure you! LOL

- amistre64

have a great time ;)

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