Question

A house was bought many years ago for $160,000. Due to inflation, its value has increased
about 5% each year.
(a) Identify the initial value, growth rate, growth factor.
(b) Write an exponential function that models the value of the home over time.
(c) If the house was bought 20 years ago, what is it worth today?

Answer 1

Answer:

Step-by-step explanation:

A) the initial value would be $160,000, the growth rate is 5% per year, and the growth factor is the annual interest.

B) $160,000(1+.05)^x$ would be the equation, and if it was diminishing by 5% each year, we would change it from 1 +, to 1 -.

C) we would have the equation $160,000(1.05)^2^0$ which would give us the value of 424,527.63 after 20 years.

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