Question

The value of a jewel in 2015 was $17500. The jewel was purchased in 2008, and its value appreciated 2.5%

each year. What was the initial value of the jewel when it was first bought? Round to two decimal places

Answer 1

$14722.14

Explanation:

We are given that

In 2015

The value of jewel=$17500

Rate of appreciation, r=2.5%

We have to find the initial value of the jewel when it was first bought.

Time, n=7 years

Final value=
`Initial\;value (r/100+1)^n`

Using the formula

`17500=Initial\;value(2.5/100+1)^7`

`17500=Initial\;value(1.025)^7`

`Initial\;value=(17500)/((1.025)^7)`

Initial value=$14722.14

Hence, the the initial value of the jewel when it was first bought=$14722.14