Question

Please help, easy points!

Brock bought his house for $135,200. A local real estate agent predicts that the house will appreciate in value 5% each year.

What will the value of Brock's house be in 25 years?

A. $141,960

B. $290,540

C. $457,835

D. $520,162

Answer 1

The answer is C. $457,835

Answer 2

The value of Brock's house will be $457,835 in 25 years.

Option C is correct.

Explanation:

Given: Brock bought his house for $135,200. A local real estate agent predicts that the house will appreciate in value 5% each year.

The value of house increase by 5% every year.

Formula:
`FV=PV(1+r)^n`

where,

FV = Future value of house

PV = Present value of house (PV=$135,200)

r = rate of interest (r=0.05)

t = period of mortage (t=25)

Substitute the values into formula and solve for FV

`FV=135200(1+0.05)^(25)`

`FV=135200(1.05)^(25)`

`FV=135200\cdot 3.38635`

`FV=457835`

Hence, The value of Brock's house will be $457,835 in 25 years.