Sharon is 18 and would like to buy a house when she is 34. What is the discount factor for today's prices if the housing values
2 answers:
Solution:
we are given that
Sharon is 18 and would like to buy a house when she is 34.
it mean
we have been asked to find the discount factor for today's prices if the housing values increase 7% per year?
It mean
As we know that
Let current price be 100, then the future price will be
Hence the discount factor is
Hence the correct option is 33.9%.
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Answer: Choice D
This basically says "the nth term is found by computing math, aka evaluating some function, based on the (n-1)th term".
As an example, we could have a function that simply squares the input
Let's say we started at 5. It squares to 25 which in turns squares to 625, and so on. Each new term is based on the old term. Namely, we squared the old n-1 term to get the new nth term.