Question

The Smiths bought a new house for $90,000. If the steady annual growth rate is 7.8%, how much will the house be worth after

3 years ?

Answer 1

$ 112 745 .39

Explanation:

7.8 % = .078 in decimal

90 000 ( 1 + .078)^3 = 112745.39

Answer 2

After 3 years ,the house will worth : $112 745.38968

Explanation:

Method 1:

the house will worth after 1 year :

`90000+90000* (7.8)/(100) =97020`

the house will worth after 2 years :

`97020+97020* (7.8)/(100) =104587.56`

the house will worth after 3 years :

`104587.56+104587.56* (7.8)/(100) =112745.38968`

Method 2:

we consider the geometric sequence Un of :

First term U₀ = 90000

common ratio q = 1 + (7.8/100) = 1.078

Then

`U_(3)=q^(3)* U_(0)`

Then

`U_(3)=(1,078)^(3)* 90000=112745.38968`