You purchase a home for $125,000. The value of the property increases by 1.9% every year. After ten years, you decide to sell the home. In the meantime, you have made renovations and improvements to the house which increase its sale value by $48,300. How much will you sell the house for, to the nearest hundred dollars?

Question

Mathematics

Hadley Mcclure

23 June, 18:47

You purchase a home for $125,000. The value of the property increases by 1.9% every year. After ten years, you decide to sell the home. In the meantime, you have made renovations and improvements to the house which increase its sale value by $48,300. How much will you sell the house for, to the nearest hundred dollars?

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Answers (1)

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Patrick Maldonado · Answer 1

We can use the formula:

F = P · (1 + i) ^n

where: P = $125,000, i = 0.019 (1.9 %), n = 10

F = $125,000 · (1 + 0.019) ^10

F = $125,000 · 1.019^10

F = $125,000 · 1.207096

F = $150,887

And we have to add $48,3000 (for renovations and improvements)

$150,887 + $48,300 = $199,187 ≈ $199,200

Answer: You will be sell the house for $199,200.