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- Thread starter linapril
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$\displaystyle H=H_0(1+r)^t$

We then let $H=2H_0$, $t=20$ and solve for $r$:

$\displaystyle 2H_0=H_0(1+r)^{20}$

$\displaystyle 2=(1+r)^{20}$

Now, raise each side to a power of $\dfrac{1}{20}$, then subtract 1 from each side, and you will have isolated $r$. Then multiply by 100, and use your calculator to get a decimal approximation if you want.

edit: Please let me suggest that your topic titles be more indicative of the nature of the question. I would use something like "Computing growth rate of investment" or something similar.

- Feb 13, 2012

- 1,704

What is the simplest way of solving this?

The value of a house is doubled in 20 years. What is the annual average percentage increase, if it is assumed to be the same each year?

Very easy indeed...

$a= 2^{\frac{1}{20}} \sim 3.53 \text{%}$

Kind regards

$\chi$ $\sigma$

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Very easy indeed...

$a= 2^{\frac{1}{20}} \sim 3.53 \text{%}$

Kind regards

$\chi$ $\sigma$

- Feb 13, 2012

- 1,704

MarkFl has already explained that in excellent way!... an alternative explanation is that the expression of the of value of the house after N years is...Could please explain how you got that answer?

$\displaystyle v= 2^{\frac{N}{20}}$ (1)

Now all what You have to do is setting in (1) N=1...

Kind regards

$\chi$ $\sigma$