If you buy a house for $150,000 and anticipate that the market value of the home will increase at 5 percent a year,how much will the house be worth in 14 years?

Question

Quizplus · Accepted Answer

To calculate the future value of the house after 14 years, we can use the formula:
FV = PV * (1 + r)^n
where PV is the present value (150,000), r is the annual interest rate (5% or 0.05), and n is the number of years (14).

Plugging in the numbers, we get:
FV = 150,000 * (1 + 0.05)^14
FV = 150,000 * 1.97969
FV = 296,953.34

Rounding this to the nearest thousand gives us $300,000. Therefore, choice D is the correct answer.

If You Buy a House for $150,000 and Anticipate That