Question

Angela is purchasing a home for $130,520. After remodeling the kitchen and bath, the value of the home appreciates 6.1% per year. How much is Angela’s house worth in 10 years?

Answer 1

Explanation:

To calculate the value of Angela's house after 10 years of appreciation, we need to apply the 6.1% annual appreciation rate.

First, let's calculate the appreciation amount for each year. We can use the formula:

Appreciation = Initial value * Appreciation rate

Appreciation for one year = $130,520 * 0.061 = $7,979.32

Now, let's calculate the value of the house after 10 years:

Value after 10 years = Initial value + Total appreciation

Value after 10 years = $130,520 + ($7,979.32 * 10)

Value after 10 years = $130,520 + $79,793.20

Value after 10 years = $210,313.20

Therefore, Angela's house will be worth $210,313.20 after 10 years of appreciation.

Answer 2

Angela's house will be worth $242,587.42 in 10 years as it appreciates at a rate of 6.1% per year

Explanation:

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

A = the final amount

P = the initial amount (the purchase price of the house)

r = the annual interest rate (6.1% in this case)

n = the number of times the interest is compounded per year (we'll assume it's compounded annually, so n = 1)

t = the time period (10 years)

A = $130,520(1 + 0.061/1)^(1*10)

A = $130,520(1.061)^10

A = $242,587.42