Question

Aaron purchased a house that was worth $196,000. The value of the house increased by 9% each year for the next 5 years. What is the value of the house after 5 years?

Answer 1

The value of the house after 5 years is $1,262,782.52.

Step-by-step explanation:

To calculate the value of the house after 5 years, we need to find the value of the house after each year and then add them up. Starting with the initial value of $196,000, we can calculate the value after the first year by multiplying it by 1.09 (100% + 9% increase). This gives us $213,640. Continuing this calculation for each year, we get the following values:

1. Year 1: $213,640
2. Year 2: $232,727.60
3. Year 3: $253,118.71
4. Year 4: $274,941.24
5. Year 5: $298,354.97

Adding up these values gives us a total value of $1,262,782.52 after 5 years.