Question

William buys a home for $362,000 his home is predicted to increase in value 4.5% each year what is the predicted value of his home in 20 years

$842,380
$852,540
$860,564
$873,040

Answer 1

362,000×(1+0.045)^(20)
=873,040.48

Answer 2

Answer: The predicted value of the home is $873,040.

Explanation:

Here, the initial value of the home, P = $ 362,000

Rate of increasing per year , r = 4.5 %

Time, t = 20 years

Hence, the new price of the home after 20 years,

`A=P(1+(r)/(100))^t`

`=362000(1+(4.5)/(100))^(20)`

`=362000(1+0.045)^(20)`

`=362000(1.045)^(20)`

`=362000* 2.41171402 = 873040.475\approx 873040`

Thus, the predicted value of the home in 20 years is $ 873,040.