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If Angela's $98,760 home appreciates three percent a year, will she have enough appreciation to try to sell the home for a $15,000 profit in five years?

Respuesta :

jepessoa

Answer:

Yes, she will (total profit of $15,730)

Explanation:

We must determine the future value of Angela house:

future value = present value (1 + appreciation rate)ⁿ

  • present value = $98,760
  • appreciation rate = 3%
  • n= 5

FV = $98,760 (1.03)⁵ = $98,760 x 1.1592740743 = $114,490

now the difference between the future value and the present value = $114,490 - $98.760 = $15,730

Parrain

Based on the rate of increase and the cost of the house, Angela's home will indeed have appreciated enough to make a $15,000 profit in five years.

What is the value of Angela's house in 5 years?

This can be found by the formula:

= Home value x ( 1 + rate) ^ number of years

Solving gives:

= 98,760 x (1 + 3%) ⁵

= $114,490

The profit is:

= 114,490 - 98,760

= $15,730

This is higher than the required profit of $15,000.

Find out more on future value at https://brainly.com/question/24703884.

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