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kelseylynne54
Tracy purchased a building for $209,350. The land appreciates about 4.5% each year. What is the value of the land after 15 years?
use this formula \[P = C (1 + r/n)^{nt}\]
C= initial deposit..r=rate...n=number of times you pay per year...t=time
Let's start by thinking about growth (or appreciation). Growing something by 100% is the same as \[2^{1}\] Then if we grow by 200% we have \[2^{2}\] We can therefore generalize this to \[2^{x}\] Which means, double this x times but what if we refactor this as \[(1 + 100\%)^{x}\] We can of course change the 100% to any value we want. I hope this helps. To learn more on this, read http://betterexplained.com/articles/an-intuitive-guide-to-exponential-functions-e/.
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