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cricket20 [7]
3 years ago
10

If Angela's $98,760 home appreciates three percent a year, will she have enough appreciation to try to sell the home for a $15,0

00 profit in five years?
Business
1 answer:
Mama L [17]3 years ago
7 0

Answer:

Yes, she will (total profit of $15,730)

Explanation:

We must determine the future value of Angela house:

future value = present value (1 + appreciation rate)ⁿ

  • present value = $98,760
  • appreciation rate = 3%
  • n= 5

FV = $98,760 (1.03)⁵ = $98,760 x 1.1592740743 = $114,490

now the difference between the future value and the present value = $114,490 - $98.760 = $15,730

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