Problema Solution
Jacj and Jill buy a house for $180,000. The value of the house grows compounded countinuosly at a rate of 6.25% per year. (show work for solutions)
a)How much will the house be worth in six years?
b) How many years until the value of the house has doubled to 360,000?
Answer provided by our tutors
a) 180000(1+0.0625)^6=$258968.02
b) 180000(1+0.0625)^6=360000
(1+0.0625)^n=2
(1.0625)^n=2
log[(1.0625)^n] = log 2
nlog(1.0625)=log2
n=log(2)/log(1.0625) = 11.43 years
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