Question

What be it’s value, to the nearest thousand dollars, in 13 years?

Answer 1

The Solution:

The value of the house in 13 years time can be calculated using the formula below:

`F\mathrm{}V=P\mathrm{}V(1+(r)/(100))^n`

In this case,

`\begin{gathered} FV=\text{future value (value after 13 years)=?} \\ PV=\text{present value= \$249000} \\ r=\text{ rate \%=10.5\%} \\ n=\text{ number of years=13 years} \end{gathered}`

Substituting these values in the formula above, we get

`FV=249000(1+(10.5)/(100))^(13)=249000(1+0.105)^(13)`
`FV=249000(1.105)^(13)=911819.68\approx\text{ \$911820}`

Thus, the value of the house in 13 years is $911820 (to the nearest dollars)