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20 May, 02:39

Gareth bought a home for $135,000. The home gained 2.2% in value every year for eight years until Gareth sold it. How much profit did Gareth make, to the nearest hundred dollars?

Answers:

a. $60,700

b. $25,700

c. $23,800

d. $29,100

+5
Answers (1)
  1. 20 May, 04:38
    +1
    We are given with

    Present worth = $135000

    Interest rate = 2.2% (assume effective)

    Time = 8 years

    The future worth is

    F = 135000 (1 + 0.022) ^8

    F = 160672.27

    The profit is

    $160672.27 - $135000 = $25672.27

    The closest answer is

    b. $25,700
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