The value of a house appreciates 5% per year. How much is the house worth after 6 years if its current worth is ₹ 15 Lac. [Given: (1.05)5 = 1.28, (1.05)6 = 1.34] - Mathematics and Statistics

Sum

The value of a house appreciates 5% per year. How much is the house worth after 6 years if its current worth is ₹ 15 Lac. [Given: (1.05)5 = 1.28, (1.05)6 = 1.34]

Solution

Since the current worth of the house is ₹ 15 Lac and it appreciates 5% per year, the value of the house in every successive year form a G.P. with a = 15 Lac and r = 1 + 5/100 = 1.05

∴ value of the house after 6 years

= t7 = ar7–1

= 15(1.05)6

= 15 × 1.34

= 20.1 Lac

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