Solve the problem. Round your answer to the nearest cent.
-If inflation is $3 \%$ a year compounded annually, what will it cost in 12 years to buy a house currently valued at $\$ 75,000$ ?
A) $\$ 103,817.54$
B) $\$ 110,140.03$
C) $\$ 106,932.07$
D) $\$ 89,671.36$

Question

Quizplus · Accepted Answer

To find the future value of the house, we use the formula for compound interest: $FV = PV(1 + r)^n$, where $FV$ is the future value, $PV$ is the present value (\$75,000), $r$ is the annual interest rate (3% or 0.03), and $n$ is the number of years (12). Plugging in the values, we get $FV = 75000(1 + 0.03)^{12}$, which calculates to approximately \$106,932.07.

Solve the Problem 3%3 \%3% A Year Compounded Annually, What Will It Cost in 12

Solve the Problem $3 \%$ A Year Compounded Annually, What Will It Cost in 12