Answer to Question #272532 in Other for sumu

Question

a) The value of a particular land in Malabe was purchased for Rs 10 million. Its

value appreciates according to the equation

L is the value of the land

L(O) is the purchase price

k is the growth constant

t is the time in years

L = L(O) · ekt

After extensive research it has been found that the growth factor k is 3% per year.

How long will it take for the land to double its purchase value? ( 4 marks)

b) At the same time the land was purchased, a house was built on the land for Rs

3.5 million. The value of the house depreciates according to

H H(O) · e-qt

His the value of the house

H(O) is the price of building the house

q is the depreciation constant

t is the time in years

After some research it has been found that the depreciation factor q is 2% per year.

How long will take for the house to lose 75% of its initial value? (4 marks)

Answer 1

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