Question

Joseph paid $105,000 for his home twenty years ago. Since then, his house has increased its property value by 2.0% every year. In addition, Joseph has made renovations and improvements to the house which will increase its sale value by $28,700. If Joseph sells his home, how much profit will he make, to the nearest hundred dollars?
a.
$79,700
b.
$84,700
c.
$93,700
d.
$122,400


Please select the best answer from the choices provided

A
B
C
D

Answer 1

Initial value after 20 years = 105,000*(1.02)^20 ≈ 105,000*1.48595 = 156,024.
Sale price = 156,024 + 28,700 = 184,724.
Profit = 184,724 − 105,000 = 79,724 ≈ 79,700 (nearest hundred).

Answer: A.