Belinda is thinking about buying a house for $286,000. The table below shows the projected value of two different houses for three years: Number of years 1 2 3 House 1 (value in dollars) 294,580 303,417.40 312,519.92 House 2 (value in dollars) 295,000 304,000 313,000 Part A: What type of function, linear or exponential, can be used to describe the value of each of the houses after a fixed number of years? Explain your answer. (2 points) Part B: Write one function for each house to describe the value of the house f(x), in dollars, after x years. (4 points) Part C: Belinda wants to purchase a house that would have the greatest value in 25 years. Will there be any significant difference in the value of either house after 25 years? Explain your answer, and show the value of each house after 25 years. (4 points)

The values of two houses (in thousands of dollars)

Find

A) the nature of the function, linear or exponential, that can be used to model the value after x years

B) the actual function f(x) that can be used in each case

C) f(25) for each house. Is there a significant difference?

Solution

A) The oddball numbers give you a clue immediately that the value of house 1 will be best modeled by an exponential function.

The value of house 2 is increasing steadily at 9,000 per year, so is modeled by a linear function.

B) The ratio of values from a given year to the year before for house 1 is

... 294.58/286 = 1.03

A check for other years reveals the same ratio, so the exponential function can be written for house 1 as

... f(x) = 286·1.03^x . . . . . value of house 1

In part A we determined the year-to-year difference in value for house 2 is 9,000. That is the slope of the linear function. Then (in thousands), that function is

... f(x) = 286 +9x . . . . . value of house 2

C) After 25 years, the house values are (in thousands of dollars)

The value of house 1 has more than doubled in the same time that the value of house 2 has increased by about 79%. This is a significant difference.

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An exponential function will always outperform a linear function over a long enough time period.

b

step-by-step explanation:

the answer is 200

step-by-step explanation:

the way the question is worded, it seems to imply the $264 interest is simple interest, not compound interest.

the simple interest for 2 years is $264; the simple interest for 1 year is $132.

$132 interest on a $600 investment means an interest rate of (132/600)*100 = 22%.

the value of $200 at 22% interest compounded annually for three years is

200%281.22%29%5e3

the amount of interest is that value, minus the original $200.