How to solve a y=ab^x problem

Question

A home is purchased for $120,000 and has an annual appreciation of 6% what will the house be worth in 25 years? I need an answer ASAP

Answer 1

A = 120000(1.06)²⁵

Can you calculate and answer?

Answer 2

y=ab^x

Think this as Y=a(1+r)^^x

^{If rate increase , then +.}

^{if rate decrease, then -.}

^{y=12000(1+0.06)^25.}

^{y=12000(1.06)^25.}

^{It doesn't matter you do (1.06)^25 first or later because it is multiplication, you get same answer.}

Please, give me sum up if you like it.

          give me sum down if you do not like it.

          give me explanation if I am wrong.

          give me any comments regarding my answers.

Thanks!

Answer 3

For problems involving interest we use the formula:

A = P(1 + r/n)^nt, where A= total amount P= principal amount, r= interest rate, t= time, and n= number of times the interest is compounded per year. Since we know that the house is appreciated annually, n=1

Substituting the values from this problem into that formula we get:

A = 120,000(1 + .06/1)¹⁽²⁵⁾

A = 120,000(1.06)²⁵

A = 120,000(4.29)

A = 515,024.49

The house will be worth $515,024.49