Question

Tammy's home cost her S184,000. She lives in an area with a lively real estate market, and her hormincreases in value by 3.5%

Answer 1

Answer:

• D. $103800

Step-by-step explanation:

Initial value of house:

• $184000

Yearly increase rate of value:

• 3.5%

Time

• 13 years

Since the increase is concerning the current price it would be exponential growth.

The function would be:

• V(t) = 184000*(1 + 3.5/100)^t, where V is the value after t years

For t= 13 we get:

• V(13) = 184000*(1.035)^13 = 287800

Profit made would be:

• 287800 - 184000 = 103800

Correct option is D.

Answer 2

Answer:

Cost of Tammy's house =$184000

Rate of interest = 3.5% per annum

After 13years price will be

$P(t) = 184000 {(1 + \frac{3.5}{100}) }^{t} \\ P(t) = 184000 {(1 + 0.035)}^{t} \\ P(13) = 18400 {(1.035)}^{13} \\ P(13) =\ 287768$

Total profit= $(287767-184000)= $103768

D. $103800 is the right answer.