Question

You bought your current house 10 years ago for £55,000. There are currently three similar properties for sale on your street. Property 1 £75,000 Property 2 £80,000 Property 3 £83,500 You want to put your house up for sale at a price that: • makes you at least 40% profit on the amount you paid for your house; and • is no more than the mean price of the properties currently for sale on your street. Suggest a price that you could sell your house for. Explain your answer.

Answer 1

The house could be sold between £ 77,000 and £ 79,500

Explanation:

Cost of the house = £ 55,000

40% profit on the amount paid for the house = 40% * 55,000 = 0.4 * 55,000 = £ 22,000

Suggested price with at least 40% profit = £ 55,000 + £ 22,000

Suggested price with at least 40% profit = £ 77,000

Properties price on the same street:

Property 1 £75,000

Property 2 £80,000

Property 3 £83,500

Mean of these prices = (75,000 + 80,000 + 83,500) / 3

Mean of these prices = 238,500 / 3

Mean of these prices = £ 79,500

Therefore the price could be between £ 77,000 (40% profit on the amount paid for the house 10 years ago) and £ 79,500 (the mean price of the properties currently for sale on the same street)