To calculate inflation, the following equation is given
[tex]i=(\frac{p_2}{p_1})^{1/n}-1[/tex]
where i represents the inflation rate(in decimals), p1 the starting value of the house, p2 the value of the house after a amount of n years.
If we use this equation for a house with a current cost of $224,200 and an inflation of 2.37%, we're going to have
[tex]0.0237=(\frac{p_2}{224200})^{1/n}-1[/tex]
To calculate the how much the house will be worth in 2 years, we substitute n for 2 and solve for p2.
[tex]\begin{gathered} 0.0237=(\frac{p_2}{224200})^{1/2}-1 \\ 1.0237=(\frac{p_2}{224200})^{1/2} \\ 1.0237^2=(\frac{p_2}{224200}) \\ p_2=1.0237^2\cdot224200 \\ p_2=234953.010898 \\ p_2\approx234953.01 \end{gathered}[/tex]
