A home’s value increases at an average rate of 5.5% each year. The current value is $120,000. What function can be used to find the value of the home after x years?
For the answer to the question above, 5.5% converted to a decimal is 0.055. However, the house already retains 100% of it's value each year, with 5.5% as an increase. therefore we can use the function f(x) = 120,000(1.055)x to solve this.
