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2 January, 08:24

Suppose you inherited a house that was purchased in 1950 for 20,000. It is now 2015 and the value of the house has increased by approximately 5% each year what is the house worth now

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  1. 2 January, 08:50
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    This deals with exponential growth.

    house value = 20,000 * (1.05) ^years

    (where years is # of years from 1950 - so 1950 = 0, 1951 = 1, etc)

    house value = 20,000 * (1.05) ^65

    house value = 20,000 * 23.8399005592

    house value = 476,798.01
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