Question

David bought a house for 150,000 in 2000. After 4 years it’s value increased to 190,000. Let x be the year since 2000, and y be the value of the house. Write an equation to estimate the value of the house.

Answer 1

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Explanation:

If it is a LINEAR increase in values:

150 000 + 10 000 x = value

If it is exponential, it is a bit more involved :

190 000 = 150 000 ( 1 + i)^4

19/15 = (1+i)^4 log both sides

i = 6.0878 % per year

the the value becomes

value = 150000 (1 +.060878)^x