Tammy’s home cost her $184,000. she lives in an area with a lively real estate market, and her home increases in value by 3.5% every year. if tammy sells her home after thirteen years, how much profit will she have made, to the nearest hundred dollars?

$103,768

Step-by-step explanation:

Let x be the number of years after Tammy purchased her home.

We have been given that Tammy’s home cost her $184,000. She lives in an area with a lively real estate market, and her home increases in value by 3.5% every year.

We can see that value of house will increase exponentially as the value of increases 3.5% per year.

Since an exponential function is in form: , where,

a = Initial value,

b = For growth b is in form (1+r) where r represents growth rate in decimal form.

Let us convert our given growth rate in decimal form.

Upon substituting our values in exponential form of function we will get the value (y) of Tammy's home after x years as:

Therefore, the function represents value of Tammy's home after x years of purchase.

Let us find the value of home after 13 years by substituting x=13 in our function.

Let us subtract cost of the home from the value of home after 13 years to find the amount of profit.

Therefore, Tammy will have made a profit of $103,768.