Calculating an original price on a house

Mathematics
Tutor: None Selected Time limit: 1 Day

If a house is worth $175,000 today and has appreciated at 5% per year, what was the house worth 6 years ago?  And, how is this solved?

May 31st, 2015

175000 5% per year

what was it worth 6 yeas ago

so for each year we go back the price of the house drops 5% from that value

175000*0.95^x x=number of years

175000*0.95^5= 135411.6640625

or you can go the long way and do

175000*.95=166250*.95=157937.5*.95=150040.625*.95=142538.592375*.95=135411.66275625

i use 0.95 since we still maintain 95% of the value

May 31st, 2015

whoops i thought 5 years its suppose to be 6 so 175000*.95^6

= $128641.08 was the value of the house worth 6 years ago

continuation from before 135411.66275625*.95=128641.08

= $128641.08 was the value of the house worth 6 years ago

= $128641.08 was the value of the house worth 6 years ago


May 31st, 2015

Jordan.  Thanks for your help.  The answer actually is slightly different.  We had the answer, we just didn't know how to solve it.  The formula to solve is actually 175,000 / (1.05^6) = 130,587.  Again, though, thank you very much.

Jun 1st, 2015

Are you studying on the go? Check out our FREE app and post questions on the fly!
Download on the
App Store
...
May 31st, 2015
...
May 31st, 2015
Dec 6th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer