The following function represents the value of a house after x years:

f (x) = 242,000 (0.96) x

What does 0.96 represent?

The present value of the house

The value of the house after x years

The increase in the value of the house per year, which is 4%

The decrease in the value of the house per year, which is 4%

Hi there!

The answer is the decrease in the value of the house per year, which is 4%.

The present value of the house is represented by 242,000.

The value of the house after x years is represented by the entire function f (x) = 242,000 (0.96) ^x.

Hence, 0.96 represents the decrease in value per year (since it represents the factor of growth, and is smaller than 1, so we're dealing with a decrease), which is 4%.