Question

A house is losing value at a rate of 5.4% per year. In 2009, the house was worth $331,000. Find the value of the house in 2021.

Answer 1

$169803

Explanation:

Given data

rate of decrease = 5.4%

time = 2009-2021= 12years

P= $331,000

Let us apply the compound interest formula

A=P(1-r)^t----------------note the minus sign because this is a decrease

A= 331000(1-0.054)^12

A= 331000(0.946)^12

A= 331000*0.513

A=$169803

Hence the value in 2021 is $169803