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A house worth £80,000 in January 2012 is set to decrease in value by 7% per year.

A more optimistic forecast suggests that the value of the house will increase by 4% per year. According to this forecast, how much will the house be worth in January 2015?

Respuesta :

olayemiolakunle65

Answer:

The house would be worth £89989.12 in January 2015.

Step-by-step explanation:

With respect to the optimistic forecast, the value of the house will increase by 4% per year.

For the first year (January 2012 to January 2013),

4% of £80000 = 0.04 x £80000

                      = £3200

The cost of the house = £80,000 + £3200

                                     = £83200

For the second year (January 2013 to January 2014), we have;

4% of £83200 = 0.04 x £83200

                        = £3328

The cost of the house = £83200 + £3328

                                    = £86528

For the third year (January 2014 to January 2015), we have;

4% of £86528 = 0.04 x £86528

                        = £3461.12

The cost of the house = £86528 + £3461.12

                                     = £89989.12

According to the forecast, the house would be worth £89989.12 in January 2015.

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