Question

What be it’s value, to the nearest thousand dollars, in 13 years?

Answer 1

The Solution:

The value of the house in 13 years time can be calculated using the formula below:

$F\mathrm{}V=P\mathrm{}V(1+\frac{r}{100})^n$

In this case,

$\begin{gathered} FV=\text{future value (value after 13 years)=?} \\ PV=\text{present value= \ 249000} \\ r=\text{ rate \%=10.5\%} \\ n=\text{ number of years=13 years} \end{gathered}$

Substituting these values in the formula above, we get

$FV=249000(1+\frac{10.5}{100})^{13}=249000(1+0.105)^{13}$$FV=249000(1.105)^{13}=911819.68\approx\text{ \ 911820}$

Thus, the value of the house in 13 years is $911820 (to the nearest dollars)