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27 votes
27 votes
At the start of 2014, Jim's house was worth £240,000.

The value of the house increased by 5% every year.

Work out the value of his house at the start of 2017.

User Aclowkay
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1 Answer

17 votes
17 votes

Answer:

£277830

Explanation:

You want the value in 2017 of a £240,000 house that increased in value by 5% per year since 2014.

Exponential relation

The house value is described by the exponential relation ...

value = (initial value)·(1 +growth rate)^t

Using the given numbers, this is ...

value = 240000(1 +0.05)^t . . . . . . where t is in years

After 3 years, the value is ...

value = 240,000(1.05^3) = 277830

At the start of 2017, the value of Jim's house was £277,830.

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At the start of 2014, Jim's house was worth £240,000. The value of the house increased-example-1
User Reza Jooyandeh
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