Answer:
The value now = $207,360
Explanation:
Rate of increase = 20% per year = 20/100 = 0.2 per year
value 3 years ago = $120,000
interest at year 1:
20% of 120,000
= 0.2 × 120,000 = 24,000
Value at the end of year 1
= initial value + interest
= 120,000 + 24,000 = $144,000
In year 2:
20% of 144,000
= 0.2 × 144,000 = 28,800
Value at the end of year 2:
144,000 + 28,800 = $172,800
In year 3
0.2 × 172,800 = 34,560
Value at the end of year 3:
34,560 + 172,800 = $207,360