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?
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
or you can go the long way and do
i use 0.95 since we still maintain 95% of the value
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
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.
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