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4. The value of a new home that sold for $132,000 will increase at 5% each year for 12 years

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Answer:

the value of the new home after 12 years of increasing at 5% per year is $237,044.05.

Explanation:

To find the value of the new home after 12 years of increasing at 5% per year, we can use the following formula for compound interest:

A = P(1 + r/n)^(n*t)

where:

A = the final amount (value of the home after 12 years)

P = the initial amount (sale price of the home)

r = the annual interest rate (5%)

n = the number of times the interest is compounded per year (assuming annual compounding, n = 1)

t = the number of years

Plugging in the given values, we get:

A = $132,000(1 + 0.05/1)^(1*12)

= $132,000(1.05)^12

= $132,000(1.795856)

= $237,044.05

Therefore, the value of the new home after 12 years of increasing at 5% per year is $237,044.05.

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