To find out the cost of the house 4 years from now, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the house
P = the initial price of the house ($180,000)
r = the annual interest rate (3%)
n = the number of times the interest is compounded per year (assuming it's compounded annually)
t = the number of years (4 years)
Plugging the values into the formula:
A = 180,000(1 + 0.03/1)^(1*4)
Simplifying the equation:
A = 180,000(1 + 0.03)^4
Calculating:
A ≈ 180,000(1.03)^4
A ≈ 180,000(1.125508)
A ≈ $202,991.59
Therefore, the cost of the house 4 years from now would be approximately $202,991.59.
What will a 180 000$ house cost 4years from now if the price appreciation for homes over that period averages 3% compounded annually?
1 answer