# SOLUTION: A home was purchased for \$120,000 in 2001. After one year the home had appreciated 5%. After one more year, the home had appreciated an additional 4%. What was the value of the

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 Question 38199: A home was purchased for \$120,000 in 2001. After one year the home had appreciated 5%. After one more year, the home had appreciated an additional 4%. What was the value of the home after these two years, rounded to the nearest hundred dollars? A) \$124,800 B) \$126,000 C) \$130,800 D) \$131,000 . A new car is marked down from \$28,000 to \$25,200. What is the discount rate? A) 9% B) 11% C) 10% D) 15%Answer by josmiceli(9671)   (Show Source): You can put this solution on YOUR website!P = purchase price a = rate of appreciation V(1) = value after 1 year V(2) = value after 2 years The first year, a = 5% P = 120000 V(1) = P + aP V(1) = 120000 + (.05)(120000) V(1) = 120000(1 + .05) V(1) = 126000 V(2) = V(1) + aV(1) V(2) = 126000 + (.04)(126000) V(2) = 126000(1 + .04) V(2) = 131040 the answere is (d) 131,000 discount rate = (original price) - (discounted price) / (original price) 28000 - 25200 = 2800 2800 / 28000 = .10 the answer is (c) 10%