Question

Mr. and Mrs. Boyce bought a house for $96,000 in 1995. The real estate broker indicated that houses in their area are appreciating at an average annual rate of 4%. If the appreciation remains steady at this rate, what will be the value of the Boyce's home in 2005?

Answer 1

Since th rate of interest is calculated from the principal of the previous year, the interest is compounded annually.

P = 96000

R = 4%

T = 10 (2005 - 1995)

Amount = P(1 + R/100)n

= 96000(1 + 4/100)¹⁰

= 142103.451

The rate of Bocye's home at 2005 will be $142103.451

Rate of appreciation,

C.I = A - P

= 142,103.451 - 96000

= $46103.451

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Answer 2

Answer:

142103.4514$

Step-by-step explanation:

You will get the price of the house after one year which will be like

96000 + 96000 x 4% = 99840

and do the same procedure ten times because 2005 - 1995 = 10

then you will get the price in 2005