Question

A house cost $120,000 when it was purchased. The value of the house increases by 10% each year. Find the rate of growth each month and select the correct answer below.

A. 0.797%

B. 0.00797%

C. 0.833%

D. 0.00833%

Answer 1

For an increase rate of 10% each year
Each year has 12 months
Therefore; 10% is the rate for 1 year which is equivalent to 12 months
Thus; 1 month = 10/12 = 5/6 = 0.8333 %
Hence the rate of growth each month is 0.833%