Adrienne bought a condominium in 2005 for $155,000. She expects it to appreciate 4% per year. Calculate the expected value of the condominium after 14 years.
A) $258,086.39
B) $268,409.85
C) $86,800.00
D) $80,600.00

Question

Quizplus · Accepted Answer

The expected value of the condominium after 14 years can be calculated using the formula for compound interest: $P(1 + r)^n$, where $P$ is the principal amount ($155,000), $r$ is the annual rate of appreciation (4% or 0.04), and $n$ is the number of years (14). Plugging in these values gives $155,000(1 + 0.04)^{14}$, which equals approximately $258,086.39.

Adrienne Bought a Condominium in 2005 for $155,000