Question

The formula S=C((1=r)t models inflation, where The value​ today, the annual inflation rate​ (in decimal​ form), and Stay inflated value t years from now. If the inflation rate is 6 ​%, how much will a house now worth ​$ 170000 be worth in 6​ years? Round your answer to the nearest dollar.

Answer 1

To calculate the future value of the house, we can use the formula S = C((1 + r)^t), where S is the future value, C is the current value, r is the annual inflation rate in decimal form, and t is the number of years. Substituting the given values, the house will be worth approximately $241,467.11 in 6 years.

Step-by-step explanation:

The formula to calculate the future value of an asset with inflation is: S = C((1 + r)^t), where S is the future value, C is the current value, r is the annual inflation rate in decimal form, and t is the number of years. To calculate the future value of a house worth $170000 in 6 years with an inflation rate of 6%, we can substitute the values into the formula:

S = 170000((1 + 0.06)^6)

Simplifying the equation:

S = 170000(1.41851)

S = 241467.11

Therefore, the house will be worth approximately $241,467.11 in 6 years, rounded to the nearest dollar.