Given that in 2005 a house was purchases for 280,000 and was later sold in 2013 for 334,000, determine the increase value of the house and what the price of the house will be in 2018.
First, we subtract the two values of the house on both dates.
334,000 - 280,000 = 54,000
Then, divide the difference by the amount of years from 2005 to 2013.
54,000/8 = 6,750
Since, it says the value increases at a constant rate, this indicates that it is a linear function.
So, the linear function would start at 280,000 as the y-intercept and the slope is 6,750.
Linear Function: y = 6750x + 280,000
Lastly, to find the price of the house in 2018, we just need to plug in 13 for x since x represents the years.
y = 6750x + 280,000
Plug in 13 for x.
y = 6750(13) + 280,000
y = 87750 + 280,000
y = 367,750
Thus, the value of the house in 2018 is $367,750.
