Question

William buys a home for $362,000 his home is predicted to increase in value 4.5% each year what is the predicted value of his home in 20 years
$842,380
$852,540
$860,564
$873,040

Answer 1

362,000×(1+0.045)^(20)
=873,040.48

Answer 2

Answer: The predicted value of the home is $873,040.

Step-by-step explanation:

Here, the initial value of the home, P = $ 362,000

Rate of increasing per year , r = 4.5 %

Time, t = 20 years

Hence, the new price of the home after 20 years,

$A=P(1+\frac{r}{100})^t$

$=362000(1+\frac{4.5}{100})^{20}$

$=362000(1+0.045)^{20}$

$=362000(1.045)^{20}$

$=362000\times 2.41171402 = 873040.475\approx 873040$

Thus, the predicted value of the home in 20 years is $ 873,040.