Linear Models -
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Linear Models - |
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| The Home Buyer's Problem
In 1990 you purchased a house for $120,000. After 5 years the house is valued at $234,000. Assume that the future value of the house and the number of years the house is owned are linearly related. (a) Find an equation which relates the value v of the house and t years of ownership. (b) What is the value of the house after you have owned it for 24 years? (c) How Long must you own the house for it to be worth $360,400? |
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| Hints:
1. Set v as the y variable and t as the x variable 2. Since is a linear problem
you know that linear equation is:
3. See if either m or b is given in the problem statement. 4. First find the slope by determining the ratio of delta v over delta t. 5. Use the slope to find the
y-intecept b
by solving for b
given that you know the slope and pairs of values for v
and t, e.g.
6. Once you have the slope and the y-intercept you can now substitute values for b and m to write the formula for the linear model of this problem: v = b + mt, where v and t are variables. 7. With knowledge of the problem's
linear formula you can find values of v if a value of t is given and visa
versa.
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