Question

Tracy purchased a building for $209,350. The land appreciates about 4.5% each year. What is the value of the land after 15 years?

Answer 1

use this formula \[P = C (1 + r/n)^{nt}\]

Answer 2

C= initial deposit..r=rate...n=number of times you pay per year...t=time

Answer 3

Let's start by thinking about growth (or appreciation). Growing something by 100% is the same as
\[2^{1}\]
Then if we grow by 200% we have
\[2^{2}\]
We can therefore generalize this to
\[2^{x}\]
Which means, double this x times but what if we refactor this as
\[(1 + 100\%)^{x}\]
We can of course change the 100% to any value we want.

I hope this helps.

To learn more on this, read http://betterexplained.com/articles/an-intuitive-guide-to-exponential-functions-e/.