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Question
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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