Question

HELP i need help on part b

Wilson is thinking about buying a house for $249,000. The table below shows the projected value of two different houses for three years.

Number of years 1 2 3
House 1 (value in dollars) 253,980 259,059.60 264,240.79
House 2 (value in dollars) 256,000 263,000 270,000

Part A: What type of function, linear or exponential, can be used to describe the value of each of the houses after a fixed number of years? Explain your answer. (2 points)

Part B: Write one function for each house to describe the value of the house f(x), in dollars, after x years. (4 points)

Part C: Wilson wants to purchase a house that would have the greatest value in 45 years. Will there be any significant difference in the value of either house after 45 years? Explain your answer, and show the value of each house after 45 years. (4 points)

Answer 1

Number of years 1 2 3

House 1 (value in dollars) 249,000 253,980 259,059.60

House 2 (value in dollars) 249,000 256,000 263,000

House 1: exponential function

House 2: linear function

House 1: f(x) = 249,000 * (1.02)^(x-1)

→ f(3) = 249,000 * (1.02)³⁻¹ = 249,000 * (1.02)² = 259,059.60

House 2: f(x) = 249,000 + 7,000(x-1)

→ f(3) = 249,000 + 7,000(3-1) = 249,000 + 7,000(2) = 249,000 + 14,000 = 263,000

House 1:

f(45) = 249,000 * (1.02)⁴⁵⁻¹ = 249,000 * (1.02)⁴⁴ = 249,000 * 2.39 = 595,110

House 2:

f(45) = 249,000 + 7,000(45-1) = 249,000 + 7,000(44) = 249,000 + 308,000 = 557,000

House 1 will have a greater value than House 2 after 45 years.

Explanation:

Hope this helps, if not let me know and I will fix it.

Answer 2

Part A

The value for house 1 follows an exponential growth function since the value is increasing by 2% each year. This is because we multiply each value by 1.02 to get the next year's value.

• 249,000*1.02 = 253,980
• 253,980*1.02 = 259,059.60
• 259,059.60*1.02 = 264,240.792 = 264,240.79

In contrast, house 2's value increases by the same amount each year (7000 per year)

• 249,000 + 7,000 = 256,000
• 256,000 + 7,000 = 263,000
• 263,000 + 7,000 = 270,000

This fixed amount it increases directly leads to house 2 having linear growth.

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Summary:

• House 1 = exponential function
• House 2 = linear function

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Part B

The equation for house 1's value is y = 249000(1.02)^x

This is in the form y = ab^x, where a = 249000 is the starting value and b = 1.02 is the growth rate factor.

We can think of 1.02 as 1+0.02 to represent the 2% growth.

In other words, 1.02 = 1+r solves to r = 0.02 = 2%

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The equation for the second home's value is y = 7000x+249000

The slope m = 7000 tells us how the value is going up per year.

The y intercept b = 249000 is the original home value (when x = 0).

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Summary:

• Equation for home 1 is f(x) = 249000(1.02)^x
• Equation for home 2 is f(x) = 7000x+249000

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Part C

Let's plug x = 45 into each equation mentioned in part B

For home 1, we have

f(x) = 249000(1.02)^x

f(45) = 249000(1.02)^45

f(45) = 607,025.697

f(45) = 607,025.70

So that's the value of home 1 after 45 years of constant 2% growth per year

For the second home, we have,

f(x) = 7000x+249000

f(45) = 7000*45+249000

f(45) = 564,000

So there is a significant difference. This difference is 607,025.70 - 564,000 = 43,025.70 dollars.

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Summary:

• Home 1's value = $607,025.70
• Home 2's value = $564,000
• This is a difference of $43,025.70 which is fairly significant. It's better to go with home 1.