Answer:
The house would be worth £89989.12 in January 2015.
Step-by-step explanation:
With respect to the optimistic forecast, the value of the house will increase by 4% per year.
For the first year (January 2012 to January 2013),
4% of £80000 = 0.04 x £80000
= £3200
The cost of the house = £80,000 + £3200
= £83200
For the second year (January 2013 to January 2014), we have;
4% of £83200 = 0.04 x £83200
= £3328
The cost of the house = £83200 + £3328
= £86528
For the third year (January 2014 to January 2015), we have;
4% of £86528 = 0.04 x £86528
= £3461.12
The cost of the house = £86528 + £3461.12
= £89989.12
According to the forecast, the house would be worth £89989.12 in January 2015.
