2. A certain house costs $285.000. It is estimated that the price of the house w

Question

2. A certain house costs $285.000. It is estimated that the price of the house will rise 5% each year. If the prices actually rise at that rate, what will the price, P, of the house equal in y years? a. Fill in the table below for the price of the house in each year after the start (year o): Years Price of House $285,000 b. Explain how you calculated the price of the house for each year e. What number do you need to use if you want to multiply the output value for year 3 to get the value for year 4? d. Use your multiplier in part (c) as the base and write the rule for an exponential function for P. the price in y years e. Use your equation to calculate the value of the house in 25 years.

Explanation / Answer

years price

0 285000

1 299250

2 314212.5

3 329923.125

4 346419.28

b) price of house increases 5% each year

so , we multiuply .05 by previous value and add previous years value to it

for example for t = 1

price = 285000 + .05(285000) = 299250

c) the number needed is 1.05

d) rule for the exponential function is

P = 285000(1.05)^t

e) value of house in 25 years is

P =  285000(1.05)^25

P = $ 965111.158

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