Question

You and your spouse have narrowed your new home search. The first house is being sold for $154,300 and appreciates 4 percent annually, and the second house is $178,200 and appreciates 6 percent annually. What is the difference in the value of the two houses 5 years in the future?

Answer 1

(154 300*1.04^5)=187 729.5428$(price of the first house in five years)
(178 200*1.06^5)=238 471.7979$(price of the 2nd house five years later)

238 471.7979 - 187 729.5428=50 742.25513$(the difference required)
the last answer is the right one

I hope this help

Answer 2

Let f and s be the final values of the first and second houses.

This is an exponential growth problems that can be expressed as:

final value=initial value*rate(or common ratio)^time

f=154300(1.04)^5

s=178200(1.06)^5

So the difference in the value of the two houses after five years is:

d=178200(1.06)^5-154300(1.04)^5

d=$50742.26 (to nearest cent)

So the second house will be worth $50742.26 more than the first house after five years.