Question

you purchase a home for $200,000 that you expect to appreciate 6% in value on an annual basis. How much will the home be worth

Answer 1

The answer is $358,169.53

Step-by-step explanation:

Present value(PV) is $200,000

Interest rate(r) is 6%

Number of years(N) is 10years

The formula for finding future value is

FV = PV(1+r)^n

=$200,000(1+0.06)^10

$200,000(1.06)^10

$200,000 x 1.790847697

= $358,165.53

Alternatively;

Lets use a financial calculator

N = 10; I/Y = 6; PV = -200,000; PMT=0; CPT FV= $358,169.53

NOTE: The difference in final value result is due to the rounding off of decimal point.