Property in suburbs closer to the city is appreciating about 9% annually.If this trend continues, what will a $46,000 one-acre lot be worth in five years? Give the result to the nearest dollar.
A)$75,098
B)$71,394
C)$70,777
D)$72,011
E)$71,989

Question

Quizplus · Accepted Answer

Using the formula for exponential growth: 
A = P(1+r)^t 
where A is the final amount, P is the initial amount, r is the annual growth rate as a decimal, and t is the number of years. 
Plugging in the values: 
A = 46,000(1+0.09)^5 
A = 46,000(1.09)^5 
A ≈ 70,777 
Rounding to the nearest dollar gives the answer of choice C, $70,777.

Property in Suburbs Closer to the City Is Appreciating About