A family purchase a beach house for $350 000. They have been assured by the real-estate agent that it will gain in value by 10% each year. Each year on the anniversary of the purchase they use this claim to calculate the value of the house. If the claim is correct, how much will the house be worth five years after it was purchased.?

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Mathematics

Aurora Patel

27 March, 14:37

A family purchase a beach house for $350 000. They have been assured by the real-estate agent that it will gain in value by 10% each year. Each year on the anniversary of the purchase they use this claim to calculate the value of the house. If the claim is correct, how much will the house be worth five years after it was purchased.?

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Adams · Answer 1

If the beach house worth $350,000 had an annual value gain of 10% which is $35,000. The first year they should have $385,000, by the second year the value would of the gain would have been $38,500 which would have the house on a $423,500. By this Calculation the 3rd year gain will be $42,350 which would leave the house on a $465,850, 4th year will be gain $46,585 and worth will be$ 512,435 and that leaves us with the answer to the question on the 5th year gain will be $51,243.50 and worth will be $563,678.50