oer, bäsed on information from Zillow.com, displays the estimated value of my ho
ID: 3114454 • Letter: O
Question
oer, bäsed on information from Zillow.com, displays the estimated value of my house (red) and the average for all houses in my town (green) for the period from mid-2006 to April 1, 2011. The marks on the graph occur on April 1 of each year. Use the graph to answer Exercises 63-66 S300k S280k $260k $240 $220k $200k $180k $160k - $140k au 120k 2007 2008 2009 2010 2011 63 Find the percent decrease in the value of my house from April 1, 2007, to April 1, 2011. Then find the percent decrease in the average price of all houses in my town over the same period. Use S120,000 as the average for April 1, 2011. 64. Find the percent change for both my home and the average home in my town for each 1-year period arting on April 1, 2007. 65 1 the market turned around and my house started aining value at 6% each year, how many years would it take to get back to the highest value on the chart? Repeat for the town average.Explanation / Answer
Your house value is 200 k and max value on chart is 300k
At a yearly 6% increase : 200000* (1.06)n= 300000 so n = ln(1.5) / ln (1.06) = 6.96~= 7 years
Similarly for average house price: 120000( 1.06)n = 150000 so n= ln(1.25)/ ln(1.06) = 3.84~= 4 years
Note: here we have assumed a compounded growth of 6% on a year-on-year basis
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