Question

You buy a new home in metropolis for $179,313. Prices of homes in your area are continuously increasing by 7% per year. How much should your new home be worth in 21 years? (Show your work)

Answer 1

Each year price of your house will be increased in 1.07 times, because you have to add to price of house (100%) increasing percent (7%) and then you obtain the new price, which will be 107%=1.07.
After 21 years the price will be increased in
`(1.07)^(21)` times and become
`$179,313\cdot (1.07)^(21)=\$742,457`.
Answer: in 21 years the price of the house will be worth $742,457.