Question

The Smiths bought an apartment for $65,000. Assuming the value will appreciate at most 3% a year, how much will the apartment be in 4 years?

Answer 1

Answer:

$73158.07

Step-by-step explanation:

The way to get this is realize that appreciate by 3% means that the value will go up 3% each year. in order to do this we must multiply 65000 by 1.03 4 times. 65000 times 1.03 times 1.03 times 1.03 times 1.03 = 73158.07.

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Answer 2

Answer: $73,157.50

Step-by-step explanation:

Given: bought price of apartment(p) = $75000, rate of appreciation(r) = 4.3% and time(t) = 7 years

We know the compound interest/appreciation formula is:

S=p(1+r/100)^t

$\begin{aligned}S &=\ 65000\left(1+\frac{3}{100}\right)^{4} \\&=\ 65000\left(\frac{100+3}{100}\right)^{4} \\&=\ 65000\left(\frac{103}{100}\right)^{4} \\&=\ 65000\times 1.1255 \\&=\ 73,157.50\end{aligned}$

Therefore, the apartment will be worth about $73,157.50 in 4 years