mr williams bought a plot of land for 40,000. the value of the land appreciated by 7% each year.
calculate the value of the land after a period of two years
what is 40000(.93)^2 ?
To calculate the value of the land after a period of two years, we need to take into account the annual appreciation rate of 7%.
First, we calculate the appreciation of the land in the first year. We can use the formula:
Value after one year = Initial value + (Initial value * appreciation rate)
Substituting the values:
Value after one year = 40,000 + (40,000 * 0.07)
= 40,000 + 2,800
= 42,800
Now, we can calculate the appreciation of the land in the second year. Again, using the same formula:
Value after two years = Value after one year + (Value after one year * appreciation rate)
Substituting the values:
Value after two years = 42,800 + (42,800 * 0.07)
= 42,800 + 2,996
= 45,796
Therefore, the value of the land after a period of two years will be $45,796.