Question

The average price of a home in Darryl's neighborhood increases 3.6% each year. This year, the average price of a home is $217,000.What will the average price of a home be in 10 years?

Answer 1

Answer:

The average price will be $309,070 in 10 years

Explanation:

Here, we want to get the average price of a home in 10 years in Darryl's neighbourhood

To get this, we use the following exponential formula:

$P=C(1+r)^n$

P is the average price in 10 years

C is the current average prive which is given as $217,000

r is the yearly increase percentage which is given as 3.6% = 3.6/100 = 0.036

n is the number of years which is 10

We substitute these values into the equation above as follows:

$\begin{gathered} P=217000(1+0.036)^{10} \\ P\text{ = \ 309,070} \end{gathered}$