+ 6% = x (1 + 6%) = x 1,06
with V = value before the increase
V x 1,06 = 265,000
so V = 265,000 : 1,06 = 250,000
The value of the house before the growth in its value was £250,000.
We know that the value of most of the things in this world changes from time to time. When the value of an article is increased, we say that there's a growth in its value.
Growth is determined by the formula,
V = V₀(1+r), where V is the final price, V₀ is the initial price and r is the rate.
We are told that the value of a house increased by 6%, reaching £265,000. We are asked to calculate its initial value.
Since the value has increased, we will use the formula for growth,
with V = £265,000, r = 6%, and V₀ is to be determined.
The formula is: V = V₀(1+r)
or, V₀ = V/(1+r) = 265000/(1 + 6%) = 265000/(1 + 6/100) = 265000/(106/100)
or V₀ = 265000*100/106 = 250000
∴ The initial value of the house is £250,000.
Learn more about Growth at
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