Question

At the start of 2014 lucys house was worth ?200 000. The value of the house increased by 5% every year. Workout the value of her house at the start of 2017

Answer 1

The value of Lucys house at the start of 2017 is 231525.

Explanation:

It is given that the initial value of Lucys house is 200,000. The at the start of 2017.

The exponential function is defined as

`P=P_0(1+r)^t`

Where, P₀ is initial value, r is growth rate, t is time in years.

The value of house is defined by the function

`P=200000(1+0.05)^t`

Where, t is number of years after 2014.

`P=200000(1.05)^t`

The difference between 2017 and 2014 is 3 years.

`P=200000(1.05)^3=231525`

Therefore the value of Lucys house at the start of 2017 is 231525.