Question

you purchase a home for 125,000. The value of the property increasses by 1.9% every year. After ten years, you decide to sell the home. How much will you sell the house for, to the nearest hundred dollars?

Answer 1

To calculate the future value of the home after ten years with a 1.9% annual increase, you can use the formula for compound interest:

Future Value = Present Value × (1 + Rate)^Time

Where:

Present Value = $125,000 (initial purchase price)

Rate = 1.9% or 0.019 (expressed as a decimal)

Time = 10 years

Plug in these values to calculate the future value:

Future Value = $125,000 × (1 + 0.019)^10

Future Value ≈ $125,000 × 1.21956853695

Future Value ≈ $152,446.06711875

Rounded to the nearest hundred dollars, the amount you would sell the house for after ten years would be approximately $152,400.