Question

Andrew buys a house for $65,000, and the value of the house increases at a rate of 2% per year. How much will the house be worth in 8 years?

Answer 1

`V = $76,157.86`

Explanation:

Use the formula for compound growth.

The value increases every year and that value in turn increases the next year.

`V = P(1+r/100)^n`

`V = 65,000(1+2/100)^8`

`V= 65,000(1.02)^8`

`V = $76,157.86`