Answer:
t = 21.78436854 rounded off to 21.78 years
Explanation:
We are given the future value and the present value of land. To calculate the number of years of ownership of the land whose price has been increasing at 5% per year, we can use either use the formula for Future Value or Present value.
Here we are solving it using the future value formula which is,
FV = PV * (1 + r)^t
Where,
FV is Future Value
PV is Present value
r is the annual rate of increase
t is time period in years
Plugging in the values for FV, PV and r, we can calculate the value of t,
45417 = 15690 * (1 + 0.05)^t
45417 / 15690 = (1+0.05)^t
2.894646272 = (1.05)^t
Taking log on both sides.
Ln(2.894646272) / Ln(1.05) = t
t = 21.78436854 rounded off to 21.78 years
