Question

You purchase a home for $125,000. The value of the property increases by 1.9% every year. After ten years, you decide to sell the home. In the meantime, you have made renovations and improvements to the house which increase its sale value by $48,300. How much will you sell the house for, to the nearest hundred dollars? a. $257,500 b. $209,200 c. $150,900 d. $199,200

Answer 1

$199,200

Explanation:

Answer 2

Your answer is D. $199,200.
First we want to find the value of the home after 10 years, which we can do by using the compound interest formula and so multiplying 125,000 by 1.019^10. This gives us $150,887.01.
Then we just need to add on the $48,300 from the renovations, which gives us $199,187.01, which rounds to $199,200.
I hope this helps!