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Homework answers / question archive / If a home buyer purchased a home for $232,500 in 2016 and home prices escalate in cost at an inflation rate of 3
If a home buyer purchased a home for $232,500 in 2016 and home prices escalate in cost at an inflation rate of 3.6 percent (%) each year, what will the same home cost in 2042? Answer: GE NEXT PAGE
Purchase price of a home in 2016 = $232,500
Given that Inflation rate of home prices = 3.6% per year
Number of years between 2016 and 2042 = 2042-2016 = 26
Home prices in the year of 2042 = $232,500 x (1+Inflation rate)26 = $232,500 x (1+3.5%)26 = $232,500 x (1+0.036)26 = $583,145.06
Ans: $583,145.06
