Question

Joey buys a home for $266,490. His home is predicted to increase in value 5% eachyear. What is the predicted value of his home in 14 years? Round answer to thenearest whole number.

Answer 1

The cost of the house was $266,490

Increase rate = 5%

The cost of the house in n years time is given as

`A=266,490(1.05)^n`

In 14 years, the cost will be

`A=266,490(1.05)^(14)`

Calculate the value

`\begin{gathered} A=266,490*1.9799 \\ A=527650 \end{gathered}`

Therefore, the value of the house in 14 years will be $527,650