Real estate values in a town are increasing at a rate of 14% per year. mrs. knoxville purchased a building for $590,000 in 2012. how much can she expect to sell the building for in 2020, assuming this trend continues? enter your answer in the box. round to the nearest whole dollar.

$1,093,026

Step-by-step explanation:

We have been given that real estate values in a town are increasing at a rate of 14% per year.  Mrs. Knoxville purchased a building for $590,000 in 2012.

We are told that real estate values are increasing at a rate of 14%, this means that values of real estates are increasing exponentially.

Since we know that an exponential function is in form: ; for growth b=(1+r), where r= growth rate in decimal form.

a= Initial value.

Let E(t) be value of real estates t years after 2012. Now let us substitute our given values in exponential function form.

Upon converting our increase rate to decimal form we will get,

Now let us substitute the value for building in 2020 by substituting t=8 as 2020-2012=8.

Now let us subtract 590,000 from 1683026 to find the amount that Mrs. Knoxville can get from selling the building.

1,683,026-590,000=1,093,026

Therefore, Mrs. Knoxville can get $1,093,026 from selling the building.

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