Shirley purchased a plot of land for $19,500. The land appreciates about 3.9% each year. What is the value of the land after five years?
what is
19500(1.039)^5 ?
22605.844
23,610.89
To calculate the value of the land after five years, you can use the formula for compound interest. The formula is:
A = P(1 + r/n)^(nt)
Where:
A is the final amount (value of the land after five years)
P is the initial amount (purchase price of the land)
r is the annual interest rate (3.9% or 0.039 as a decimal)
n is the number of times interest is compounded per year (assuming yearly compounding, so n = 1)
t is the number of years.
Now, let's plug in the values:
P = $19,500
r = 0.039
n = 1
t = 5
A = 19,500(1 + 0.039/1)^(1*5)
A = 19,500(1 + 0.039)^5
A = 19,500(1.039)^5
A = 19,500(1.197)
A ≈ $23,858.50
Therefore, the value of the land after five years will be approximately $23,858.50.