The Price in Dollars of a House During a Period

question 88

Short Answer

The price in dollars of a house during a period of mild inflation is described by the formula , where t is the number of years after 1990. How many years will it be before the house in increasing in value at a rate of $15,000 per year? Round to the nearest year.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Annual Coupon Bond

A bond that pays interest to the holder on an annual basis, typically as a fixed percentage of its face value.

Face Value

The original cost of a financial instrument as stated on the certificate or document, not influenced by the market price.

Maturity

The date on which a financial instrument, such as a bond or loan, reaches its due date and the principal amount must be repaid.