Question

what is the value of 150 acres of land forecasted to return $500/acre per year worth, at a 10% interest rate

Answer 1

The value of 150 acres of land forecasted to return $500/acre per year worth, at a 10% interest rate is $165.01.

What is interest rate?

The percentage of the principal amount that the lender or bank would charge the borrower in exchange for using its assets or money for a specific length of time can be calculated using the interest rate formula. The interest rate is the amount of money a bank pays its depositors to maintain their funds in a savings account, recurring deposit, or fixed deposit. In this section, we'll go through the interest rate formula.

The interest rate is given as

500/150 = 3.33

It is 1/3 of the 500 acres.

So, a third of 500 acres will also be the interest rate.

Interest per year of 500 acres is given by

= 500 x 10/100

=$50

So interest of 150 acres per year =50/3.33

=$15.01

So, the value of land =150 + 15.01

=$165.01

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