A) Mr and Mrs Greenland bought a house for $95000 in 1990. Real estate values in their area increase approximately 4% each year. What was the value of the house in 2007?

B) Determine the amount of interest earned if $500 is invested interest rate of 3.25% compounded quarterly for 10 years.

C) Determine the initial investment with an ending balance of $1131.73 invested at an interest rate of 6.75% compounded semiannually for 20 years.

a.$185,050.55

b.$191.11

c.$300.00

Step-by-step explanation:

a.Given that the initial value of the house was $95,000 with an annual appreciation rate of 4%.

-We get the difference between the two years to get the total years of appreciation,n:

#The value after 17 yrs is calculated using the compound formula ;

Hence, the value of the house in 2007 is $185,050.55

b. Given the invested amount is $500, n=10 and a rate of 3.25%(compounded 3.25%):

#First we calculate the effective annual rate:

The amount of the investment after 10 yrs is:

The amount of interest earned is the final value minus the principal value:

Hence, the interest earned on $500 is $191.11

c.Given the Final amount is $1131.73, n=20 yrs and the rate is 6.75% compounded semiannually.

#First we calculate the effective annual rate:

#we use the compound interest formula to equate the principal to the final value to solve for principal;

Hence, the initial investment was $300.00

step-by-step explanation:

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