Question

Ben Collins plans to buy a house for $180,000. If the real estate in his area is expected to increase in value by 1 percent each year, what will its approximate value be seven years from now? Use Exhibit 1-A. (Round your FV factor to 3 decimal places and final answer to the nearest whole dollar.)

Answer 1

The approximate value of the house is 192984

Step-by-step explanation:

I don't know what you mean by "Use Exhibit 1-A" but you can calculate this as follows

180000 * (1+1%)^7

The general formula of cumulative interest is

A * (1+i)^n

A = Amount

i = interest, in this case 1%

n = number of periods, in this case, 7