00:01
So we'll let t equals 0 be 1995.
00:07
And our investment amount at that time, so the investment in year 0 was 11 ,000.
00:18
The value appreciated to 14 ,000 in 2008.
00:28
And that is 13 years after 1995.
00:34
So this is the amount in year 13.
00:41
And we can write the formula for the amount in year t as the initial amount times 1 plus the annual growth rate r to the t.
00:54
Where r is the annual growth rate and t is the number of years since 1995.
01:10
So if we wanna find the annual growth rate r, then we set 14 ,000 equal to 11 ,000 times 1 plus r to the 13.
01:27
Because this is the amount in year 13 and this is your initial amount.
01:33
And now we wanna solve this for r.
01:39
Well, we do that by dividing both sides by 11 ,000...