Answer:
Step-by-step explanation:
worth of the house when the price rises 5% annually on average
Fv = Pv ( 1 + r)^n
where Pv = $ 220000, rate = 5 / 100 = 0.05 and n number of years = 5
Fv = $ 220000 ( 1 + 0.05)⁵
but it was estimated that it will rise by 3.5% annually
Fv for 3.5% = $ 220000 ( 1 + 0.035)⁵
the amount the house will worth less compared to 5 % growth = $ 220000 ( 1 + 0.05)⁵ - ($ 220000 ( 1 + 0.035)⁵) = $ 19490.96