In 2005 a house was purchased for $280,000 and in 2013 it was sold at $334,000. Assuming that the value of the house increased at a constant annual rate what will be the price of the house in the year 2018?

Explanation

To solve this problem, first determine the annual increase in the house's value between 2005 and 2013. The house was bought for $280,000 in 2005 and sold for $334,000 in 2013, which is an increase of $54,000 over 8 years. This gives an annual increase of $54,000 / 8 = $6,750.From 2013 to 2018, there are 5 years. Thus, the increase in value over these 5 years is $6,750 x 5 = $33,750.Adding this increase to the 2013 value gives the 2018 value: $334,000 + $33,750 = $367,750. Therefore, Option C is correct.Options A, B, and D are incorrect because they do not match the calculated increase based on the constant annual rate.