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The value of Mr. Cooper's house on July 1, 1990, was $80,200. The value on July 1, 2010, was $252,630. Assuming a constant annual rate of increase, what was the value on July 1, 2005? What is the predicted value on July 1, 2020?

User Madasu K
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Final answer:

The value of Mr. Cooper's house on July 1, 2005, was $123,307.5. The predicted value on July 1, 2020, is $338,845.

Step-by-step explanation:

To find the value of Mr. Cooper's house on July 1, 2005, we can use the constant annual rate of increase. From July 1, 1990, to July 1, 2010, the value increased by $252,630 - $80,200 = $172,430 over 20 years. Therefore, the average annual increase is $172,430 / 20 = $8,621.5. To find the value on July 1, 2005, we can subtract 5 years from 1990 and multiply the average annual increase by 5: $8,621.5 * 5 = $43,107.5. Therefore, the value on July 1, 2005, was $80,200 + $43,107.5 = $123,307.5.

To predict the value of the house on July 1, 2020, we can use the same average annual increase of $8,621.5. From July 1, 1990, to July 1, 2020, there are 30 years. Therefore, the predicted increase is $8,621.5 * 30 = $258,645. Adding this to the value on July 1, 1990, we get $80,200 + $258,645 = $338,845. Therefore, the predicted value on July 1, 2020, is $338,845.

User Derk
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