The amount of profit made by Gareth upon the sale of the home is $26,700.
Computation:
Given,
[tex]P[/tex] = Principal Amount of $135,000
[tex]i[/tex] = interest rate of 2.20%
[tex]n[/tex] =number of years are 8 years
First, the value of the home at the end of the 8th year will be computed by using the formula of future value.
[tex]\begin{aligned}\text{Future Value}&=P\times(1+i)^n\\&=\$135,000\times(1+0.022)^8\\&=\$160,672.27\end{aligned}[/tex]
Now, the profit will be computed by taking the difference of the future value of the home and the purchase price or the principal amount of the home.
[tex]\begin{aligned}\text{Profit}&=\text{Future Value\;-\;Principal Amount}\\&=\$160,672.27-\$135,000\\&=\$25,672.27\;\text{or}\;\$25,700\end{aligned}[/tex]
Therefore, at the time of sale of the home, the amount of profit gained by Gareth is $25,700.
To know more about future value, refer to the link:
https://brainly.com/question/1759639
