Sharon purchased land in 1970 for $40,000. That land increased in value approximately 3% per year. In 2005 Sharon decided to sell the land. How much could she reasonably ask as a selling price?

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Answer 1 · 2016-02-20T07:25:33

The Future Value of that of piece of land after 35 years is #$112,554.50#

From the formula:

#FV=P(1 + i)^n#

where:

#FV =the future value#
#P=amount# invested#, $40,000.00#
#i= rate, 3%#
#n= the #number of years, 35 years##
2005-1970 = 35 years

so that:

#FV=P(1 + i)^n#, plug in the values
#FV=$40,000(1+0.03)^35#
#FV=$40,000(2.81386245437)#
#FV=$112,554.50#

#Answer: $112,554.50#