You Buy a House for $220,000 in a Neighborhood Where

question 60

Multiple Choice

You buy a house for $220,000 in a neighborhood where home prices have risen 5% annually on average.You suspect that growth in home prices will slow to an average of 3.5% per year over the next five years.If your growth estimate of 3.5% growth is correct,how much less will your house be worth in five years compared with 5% growth?

• A) $3,300.00
• B) $16,500.00
• C) $19,490.95
• D) $13,870.51

---

Definitions:

Budget Constraint

The limitation on the consumption of goods and services imposed by a consumer's income and the prices of those goods and services.

Income

The total amount of money received by an individual or group over a specific time period, coming from various sources like wages, investments, or government assistance.

Apples

Edible fruits produced by an apple tree, characterized by their sweet taste and crisp texture, consumed worldwide.

Bananas

Edible fruits from plants of the genus Musa, commonly enjoyed worldwide and known for their nutritional value.