Question

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?

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.