00:01
In this problem, we need to determine the cost of a house four years from now of the price, appreciation for homes over that period, average is 8 % compounded annually.
00:11
So for that purpose, recall the formula for when something is compounded.
00:18
The final amount will be the original amount times 1 plus r over n to the power of nt, where r is the rate, n is the number of times it's compounded per year, and t is the time in years.
00:33
Now in this case, the house is currently $210 ,000.
00:40
The price is that much.
00:41
That will be p.
00:43
And r will be 8 % because the appreciation is 8%.
00:47
So that's 8 over 100 or 0 .08.
00:50
N will be 1 because it is compounded annually...