Math Help - Find Value of Ring

1. Find Value of Ring

Tanya has just inherited a diamond ring appraised at $5000. If diamonds have appreciated in value at an annual rate of 8%, what was the value of the ring 10 years ago when the ring was purchased? NOTE: What does it mean, in this question, that diamonds have "appreciated in value"? 2. Originally Posted by magentarita Tanya has just inherited a diamond ring appraised at$5000. If diamonds have appreciated in value at an annual rate of 8%, what was the value of the ring 10 years ago when the ring was purchased?

NOTE: What does it mean, in this question, that diamonds have "appreciated in value"?
It means grown. So it's grown in value at 8%

So we've got: $p\cdot 1.08^{10} = 5000$

So we need to solve for p: $p = \frac{5000}{1.08^{10}}$

Which means that: $p = 2 315.96744$

So the ring use to be \$2,315.97

3. Thanks..

Thanks a million!