If the value of land in an area is increasing 8.5 percent a year, how long will it take for property values to double?

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Mathematics

Pace

17 July, 07:38

If the value of land in an area is increasing 8.5 percent a year, how long will it take for property values to double?

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Khalil Baird · Answer 1

The formula y = a (1.085^t) can be used to determine the value of the property (y) after a given number of years (t), based on an initial value (a). Since the valueis to double, substituting 2a for y gives us 2a = a (1.085^t), for which the a's cancel. Taking the natural log of both sides gives ln (2) = t ln (1.085). Solving for t gives approximately 8.5 years.