Question

A house purchased on December 31, 2015 for $100,000 is appreciating in value at a rate of 7% each year, which represents geometric growth. Assuming this yearly appreciation continues, to the nearest dollar state the value of the house exactly 5 years after it was purchased.

Answer 1

The value of the house exactly 5 years after the house was purchased is $140,255.17.

What is the value of the house?

Appreciation is when the value of a property increases. As a result of the appreciation of the house, the price of the house would keep increasing.

The future value of the house = present value (1 + rate of appreciation)^number of years

$100,000(1.07)^5 = $140,255.17

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