Question

A home’s value increases at an average rate of 5.5% each year. The current value is $120,000. What function can be used to find the value of the home after x years? f(x) = 120,000(1.055x) f(x) = 120,000(0.055)x f(x) = 120,000(1.055)x f(x) = [(120,000)(1.055)]x

Answer 1

`f(x)=120000 * (1.055)^(x)`

Explanation:

We are given that the present value for the home is $120,000 and the rate of interest is 5.5% i.e. 0.055.

We will use the following formula:

`f(x)=P * (1+r)^(x)`

where
`P` is the present value,
`r` is the rate of interest and
`x` is the number of years.

Substituting the values in the above formula to get:

`f(x)=120000 * (1+0.055)^(x)`

`f ( x ) = 120000 * ( 1.055 ) ^ { x }`