You purchase a home for $200,000 that you expect to appreciate 6% in value on an annual basis.How much will the home be worth in ten years? (Future Value of $1,Present Value of $1,Future Value Annuity of $1,Present Value Annuity of $1. )(Use appropriate factor from the PV tables.Round your final answer to nearest dollar amount. )

Question

Quizplus · Accepted Answer

Using the formula for future value of a single amount, FV = PV(1 + r)^n, where PV = $200,000, r = 6% (convert to decimal by dividing by 100), and n = 10 years, we get:

FV = $200,000(1 + 0.06)^10
FV = $200,000(1.06)^10
FV = $200,000(1.790847)
FV = $358,169.40

Rounding to the nearest dollar, the home will be worth $358,120 in ten years.

You Purchase a Home for $200,000 That You Expect to Appreciate