Question

G assume that in january 2017, the average house price in a particular area was $308,700. In january 2000, the average price was $198,300. What was the annual increase in selling price? (do not round intermediate calculations. Enter your answer as a percent rounded answer to 2 decimal places,
e.G., 32.16.)

Answer 1

Answer: Per year increase is 4.19%

Explanation:

Percentage change in the quantity can be estimated by dividing the change in quantity over time by its original value and then multiplying by 100.

We use the FV method here,

$FV = \frac{P}{(1+r)^{17} }$

$r= (\frac{FV}{PV})^{1/17} - 1$

r= $(\frac{308,700}{198,300}) ^{1/17} - 1$

r= 0.04193 or 4.193%

Therefore, the annual rate if increase in sales price is 4.19%.