Question

Tammy’s home cost her $184,000. she lives in an area with a lively real estate market, and her home increases in value by 3.5% every year. if tammy sells her home after thirteen years, how much profit will she have made, to the nearest hundred dollars? a. $8,500 b. $87,800 c. $83,700 d. $103,800 please select the best answer from the choices provided a b c d

Answer 1

Tammy would have made $103,800 in profit under option (d) if she sold her house after thirteen years.

How do we determine worth in the future?

The worth of a current asset at some point in the future based on an estimated rate of growth is known as future value (FV). For investors and financial planners, the future value is crucial because they use it to predict how much an investment made now will be worth in the future.

The equation future value = present value x (1 + interest rate)n can be used to compute future value using compound interest. Use the following equation to determine future value with simple interest: future value = present value x [1 + (interest rate x time)].

PV= $184,000

r= 3.5%

t= 13 years

FV = PV $(1 + r)^{n}$

FV= $184,000 x $(1 + 3.5)^{13}$

FV= $184,000 x $(1.035)^{13}$

FV= $287767

To get profit,

Profit= FV - PV

Profit= $287,767 - $184,000

Profit= 103,767

=103800 (approx. )

Learn more about future value (FV): https://brainly.com/question/15071193

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