Question

At the start of 2014 Lucy’s house was worth £200,000 the value increased by 5% each year what’s the value in 2017

Answer 1

Given that the increase is constant each year we can model this exponentially as follows.

Let the value of the house at any given time t be P and the rate r.

Let P° be the original value.

The formula is :

P=P°e^rt

Doing the substitution:

P° = 200000

r = 5/100 = 0.05

t= 2017 - 201 4 = 3 years

Doing the substitution :

P =200000e^(0.05 × 3)

P = 200000 × 1.16183 = 232366

= 232366

Answer 2

Answer:

231525

Step-by-step explanation:

100% + 5% = 105%

105 ÷ 100 = 1.05

200000 x 1.05³ = 231525