Ahsan Co bought a piece of land in 1991 for $160,000 which appreciated in value at the rate of 3% per year for the first three years and then at the rate of 4% for the next four years. Find its value after 7 years.

 Ahsan Co bought a piece of land in 1991 for $160,000 which appreciated in value at the rate of 3% per year for the first three years and then at the rate of 4% for the next four years. Find its value after 7 years.

Answer

Land Value for first 3 years = 160,000 x (1.03)^3 = 174836.30

So,

Land Value for next 4 years = 174836.30 x (1.04)^4 = 204,533. 80