The Poe family bought a house for $240,000. If the value of the house increases at a rate of 4% per year, about how much will the house be worth in 20 years??

Question

The Poe family bought a house for $240,000. If the value of the house increases at a rate of 4% per year, about how much will the house be worth in 20 years??    

Answer 1

V = a(1 + r)^t, where V = value, a = original amount, r = rate, t = time

 

V = 240000(1 + 0.04)²⁰

V = 240000(1.04)²⁰

V ≈ 240000(2.191)

V ≈ 525869.55

 

In 20 years the house worth $525,869.55.