Your goal is to build your first home seven years from now. The home that you desire currently costs $215,900. New home prices are increasing by 4.2% annually. If home prices continue rising at that pace, how much will your home cost when you are ready to build seven years from now?
A) $281,113.21
B) $284,109.67
C) $287,956.36
D) $292,001.06
E) $295,474.06

Question

Quizplus · Accepted Answer

The future cost of the home can be calculated using the formula for compound interest: Future Value = Present Value * (1 + rate)^number of years. Plugging in the values: $215,900 * (1 + 0.042)^7 = $287,956.36.

Your Goal Is to Build Your First Home Seven Years