The Market value of a house is predicted to increase at an annual rate of 4% for the next five years. If the current market price is $410 000, determine to the nearest dollar, the predicted market price five years from now.

Question

Tn = ar^n-1
T5 = 410,000(o.4)^5-1
= 410 000(0.4)^4
= 410 000 (0.0256)
= 10496

I got this wrong, and I know its wrong, but how did I get it wrong?

Answer 1

Your growth factor is 100% +04% = 1.04
(just like in one of your previous question, the growth factor was 100%-15% = 85% = .85)

Set up a chart just like I did for you other question to really see and understand how the value growth

value now = ...
value after 1 year = ...
value after 2 yrs = ...
etc

BTW, give yourself a nickname instead of "anonymous" so we can tell which your previous posts are.

Answer 2

May I ask why do you have to add 100% to 0.4%?

Ok sure, when I post my next post, I'll be sure to use a different name than Anonymous. You'll see me as
-Untamed-