Question

Joseph paid $105,000 for his home twenty years ago. since then, his house has increased its property value by 2.0% every year. in addition, joseph has made renovations and improvements to the house which will increase its sale value by $28,700. if joseph sells his home, how much profit will he make, to the nearest hundred dollars?

Answer 1

the answer to this is a.

Answer 2

Profit earned on the house if he sells = $79720

Explanation:

Amount paid by Joseph for his home = $105000

His house has increased its property value by 2.0% every year

So, Property cost after 20 years :

`Cost = 105000* (1.02)^(20)\\\\\implies Cost = 105000 * 1.4859\\\\ \implies Cost=\$ 156020`

Also, Due to renovations and improvements to the house, the property cost is increased by $28700

So, Total cost of the house after 20 years = 156020 + 28700

= $184720

So, Profit earned on the house if he sells = 184720 - 105000

= $79720