1.) Calculating the future value of property: Ben Collins plans to buy a house for $220,000. If that real estate is expected to increase in value by 3 percent each year, what will its approximate value be seven years from now?

Question

1.)	Calculating the future value of property: Ben Collins plans to buy a house for $220,000. If that real estate is expected to increase in value by 3 percent each year, what will its approximate value be seven years from now?

anonymous · Answer

After seven years of interest, Ben will pay about $263,479.25.  ??

anonymous · Answer

220,000×.03=6,600          220,000 + 6,600 = 226,600
226,000×.03=6,798          226,600+6,798=227,2798
227,2798×.03=6,818.94          227,2798 + 6,818.94 = 234,097.94
234,097.94×.03=7,022.91          234,097.94+7,022.91=241,120.85
241,120.85×.03=7,233.62          241,120.85+7,233.62=248,354.47
248,354.47×.03=7,450.63          248,354.47+7,450.63=255,805.10
255,805.10×.03=7,674.15           255,805.10 + 7,674.15 =263,479.25
Final answer: $263, 479.25

anonymous · Answer

$$A=P(1+i)^{n}$$
$$A=220000(1.03)^{7}$$
A=270572.2503934714
A = $270,572.25