Suppose that a two-bedroom house in Nashville is worth $110,000 and appreciates at a rate of 2.5% each year. Homework Help ✎
How much will it be worth in 10 years?
Let x = number of years and y = value of house. Write an equation using the general form of the exponential equation.
a is the initial value of the house, and b is the multiplier.
When will it be worth $200,000?
Using the equation in part (a), guess and check values for x. Your answer will be approximate.
In Homewood, houses are depreciating at a rate of 5% each year. If a house is worth $182,500 now, how much will it be worth two years from now?
Write another equation. Note that the value is depreciating this time.