The Solution:
The value of the house in 13 years time can be calculated using the formula below:
[tex]F\mathrm{}V=P\mathrm{}V(1+\frac{r}{100})^n[/tex]
In this case,
[tex]\begin{gathered} FV=\text{future value (value after 13 years)=?} \\ PV=\text{present value= \$249000} \\ r=\text{ rate \%=10.5\%} \\ n=\text{ number of years=13 years} \end{gathered}[/tex]
Substituting these values in the formula above, we get
[tex]FV=249000(1+\frac{10.5}{100})^{13}=249000(1+0.105)^{13}[/tex][tex]FV=249000(1.105)^{13}=911819.68\approx\text{ \$911820}[/tex]
Thus, the value of the house in 13 years is $911820 (to the nearest dollars)
