Question

Carly bought a new house for $125,000. The value of the house appreciates approximately 3.5% each year. What will the value of the house be after 10 years?

Answer 1

Answer:

The value of the house after 10 years will be $176,325.

Step-by-step explanation:

The value $y$ of the house appreciates 3.5% each  year, which means after 1 year its value will be

$y =\ 125,000(1.035)$,

after 2 years

$y =\ 125,000(1.035)(1.035)$,

after 3 years

$y =\ 125,000(1.035)(1.035)(1.035)$

and so on.

Thus after nth year the value of the house will be

$y= \ 125,000(1.035)^n$.

Therefore, after 10 years the house will be worth

$y = \ 125,000(1.035)^{10}$

$\boxed{y = \ 176,325.}$.