66.8k views
1 vote
A house is currently valued at $215,000 and its value is anticipated to increase by 1.5% each year. What will the value of the house be after 8 years?

A) $237,294
B) $226,490
C) $253,151
D) $201,500

User Dch
by
8.3k points

1 Answer

5 votes

Final answer:

The value of the house after 8 years is approximately $237,294. Hence, option A) is correct.

Step-by-step explanation:

To calculate the value of the house after 8 years, we need to use the formula for compound interest:

A = P(1 + r)^t

where:
A is the future value of the house
P is the initial value of the house ($215,000)
r is the annual interest rate (1.5% or 0.015)
t is the number of years (8)

Plugging in the values, we have:

A = 215,000(1 + 0.015)^8

Calculating that expression, the value of the house after 8 years is approximately $237,294 (Option A).

User Dan Rubio
by
8.0k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories