Maxxie purchased a tract of land for $28,500. Today, the same land is worth $46,400. How many years have passed if the price of the land has increased at an annual rate of 6.9 percent?

The number of years is 7

Explanation:

The future value formula can be used in order to arrive the number of years it took the land to appreciate to $46,400 from the initial amount of $28500.

The formula is given below:

FV=PV * (1+r) ^N

FV is the future value of $46,400

PV is the original purchase price of $28500

r is the rate of return of 6.9%=0.069

46400=28500 * (1+0.069) ^N

divide both sides by 28500

46400/28500 = (1.069) ^N

1.628070175 = (1.069) ^N

taking log of both sides we have

ln 1.628070175 = N ln 1.069

N=ln (1.628070175) / ln (1.069)

N=7.305

N is approximately 7 years