Question

5. Farm land in Waller County is selling for $32,000 per acre. If it is expected to increase in value at a compound rate of 6% per year, what will its value be in 30 years?

Answer 1

The future value of an acre of farmland in Waller County, increasing in value at a compound rate of 6% per year for 30 years, would be approximately $183,791.68.

Step-by-step explanation:

The value of the farmland in Waller County after 30 years can be determined by using the formula for compound interest:

V = P(1 + r)^n

Where:

Given:

Future Value Calculation:

V = $32,000(1 + 0.06)^30

V = $32,000(1.06)^30

V = $32,000(5.74349)

V = $183,791.68

Therefore, the farmland is expected to be worth approximately $183,791.68 per acre in 30 years, assuming a compound interest rate of 6%.