Question

The price of a vacation home is currently $338,282. If the price of vacation homes is increasing at a rate of 3.65% per year, how much would a vacation home cost in 6 years?

Answer 1

Current price of Vacation Home = $338,282

Increasing rate of vacation home per year = 3.65%

Calculating the Price of Vacation home at the end of year 6:-

Future Value = CurrenT Price*(1+r)^n

where, r = Growth rate = 3.65%

n = no of years = 6

Future Value = $338,282*(1+0.0365)^6

= $419,464.03

So, vacation home cost in 6 years is $419,464.03

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