Question

Joseph paid $105,000 for his home twenty years ago. since then, his house has increased its property value by 2.0% every year. in addition, joseph has made renovations and improvements to the house which will increase its sale value by $28,700. if joseph sells his home, how much profit will he make, to the nearest hundred dollars? a. $79,700 b. $84,700 c. $93,700 d. $122,400

Answer 1

If joseph sells his home,  profit will he make = (a)  $79720

What is profit and its example?

• Profit is a term that often describes the financial gain a business receives when revenue surpasses costs and expenses.
• For example, a child at a lemonade stand spends one quarter to create one cup of lemonade.
• She then sells the drink for $2. Her profit on the cup of lemonade amounts to $1.75.

Profit earned on the house if he sells = $79720

Amount paid by Joseph for his home = $105000

His house has increased its property value by 2.0% every year

So, Property cost after 20 years :

$Cost = 105000 * (1.02)^{20}$

Cost = 105000 × 1.4859

Cost = 156020

Also, Due to renovations and improvements to the house, the property cost is increased by $28700

So, Total cost of the house after 20 years = 156020 + 28700

                                                                     = $184720

So, Profit earned on the house if he sells = 184720 - 105000

                                                                      = $79720

Learn more about profit

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