Question

Ben Collins plans to buy a house for $166,000. If the real estate in his area is expected to increase in value by 2 percent each year, what will its approximate value be five years from now?

Answer 1

$183,264

Step-by-step explanation:

The computation of the expected value for the five years from now is as followS:

As we know that

Future value = Present value × FV Value Factor

= $166,000 × 1.104

= $183,264

We simply multiplied the present value with the factor of the future value to determine the future value