Answer:
$231525.00
Step-by-step explanation:
We know that the formula to calculate the increase at a certain growth rate is,
[tex]V_f=V_i\times(1+i)^n[/tex]
Where, [tex]V_f[/tex] is the value of house at the start of 2017
[tex]V_i[/tex] is the value of her house in 2014
'i' is the rate at which value is increasing
n is the number of years (periods).
From 2014 to 2017 it is 3 years, so n = 3.
Putting the values we get,
[tex]V_f= 200000 (1+0.05)^3[/tex]
[tex]V_f= 200000(1.05)^3[/tex]
[tex]V_f= 200000 \times 1.157625[/tex]
[tex]V_f= 231525[/tex]
So the value of her house at the start of 2017 will be $231525.00
(I have assumed that the valuation is done in dollars).
