Given:
<span> Number of years 1 2 3
House 1 (value in dollars) 249,000 253,980 259,059.60
House 2 (value in dollars) 249,000 256,000 263,000
House 1: exponential function
House 2: linear function
House 1: f(x) = 249,000 * (1.02)^(x-1)
</span>→ f(3) = 249,000 * (1.02)³⁻¹ = 249,000 * (1.02)² = 259,059.60
House 2: f(x) = 249,000 + 7,000(x-1)
→ f(3) = 249,000 + 7,000(3-1) = 249,000 + 7,000(2) = 249,000 + 14,000 = 263,000
House 1:
f(45) = 249,000 * (1.02)⁴⁵⁻¹ = 249,000 * (1.02)⁴⁴ = 249,000 * 2.39 = 595,110
House 2:
f(45) = 249,000 + 7,000(45-1) = 249,000 + 7,000(44) = 249,000 + 308,000 = 557,000
House 1 will have a greater value than House 2 after 45 years.
