Question

A home 42 feet by 36 feet was built 15 years ago on a lot now valued at $27,900.00. The home would have a current value equal to a reproduction cost of $108.00 per square foot if it were not for depreciation. The depreciation of the house is due to its flat roof, which must be resurfaced at a cost of $4.00 per square foot. To the nearest thousand, the current value of the property is _.

Answer 1

The current value of the property is calculated by finding the total reproduction cost of the house minus the depreciation from the roof resurfacing and then adding the lot value. The final estimation, rounded to the nearest thousand, is $185,000.

Step-by-step explanation:

To calculate the current value of the property, we need to determine the reproduction cost of the house and subtract the depreciation due to the necessary resurfacing of the flat roof. Firstly, we calculate the area of the house which is 42 feet by 36 feet, giving us 1512 square feet. Next, the reproduction cost is $108.00 per square foot, so the total reproduction cost would be 1512 square feet × $108.00 per square foot = $163,296.00. The cost to resurface the roof is $4.00 per square foot; therefore, the depreciation equals 1512 square feet × $4.00 per square foot = $6,048.00.

To find the current value of the house, we subtract the depreciation from the total reproduction cost: $163,296.00 - $6,048.00 = $157,248.00. When we add the lot value of $27,900.00, we get a total current property value of $157,248.00 + $27,900.00 = $185,148.00. Rounded to the nearest thousand, the current value of the property is $185,000.