Question

A home’s value increases at an average rate of 5.5% each year. The current value is $120,000. What function can be used to find the value of the home after x years?

Answer 1

Answer:

$y=120,000(1.055)^x$

Step-by-step explanation:

we know that

The equation of a exponential growth function is given by

$y=a(1+r)^x$

where

y is the value of the home

x is the number of years

a is the initial value

r is the rate of change

we have

$a=\ 120,000\\r=5.5\%=5.5/100=0.055$

substitute

$y=120,000(1+0.055)^x$

$y=120,000(1.055)^x$