The Montag Family purchased a house in 2020 and expects its value (in thousands of dollars) t years in the future will be well-modeled by the function V(t)=310(1.08). By what percentage does the model predict the house will increase in value each year? The Montag Family purchased a house in 2020 and expects its value (in thousands ofdollars) tyears in the future will be well-modeled by the function . By what percentage doesthe model predict the house will increase in value each year?

Answered: The Montag Family purchased a house in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

The Montag Family purchased a house in 2020 and expects its value (in thousands of dollars) t
years in the future will be well-modeled by the function V(t)=310(1.08)
. By what percentage does the model predict the house will increase in value each year?

Expert Solution

Step 1

The rate at which value of the purchased house is increasing = r

The growth factor = b

Time = t

The initial value of house =P

The final value of the house after t hours = A

The well model function of the value of a house is given as,

V(t) = 310 (1.08)^t

This is the exponential model where

A = P b^t

Here, p = 310, A = V(t) and b = 1.08

Step by step

Solved in 2 steps

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions