102k views
5 votes
Which of the following situations illustrates the principle of contribution?

1.Because of a decline in mortgage interest rates, a homeowner in a certain market is able to list her house at a higher price.
2.The appraised value of a house goes up by $20,000 over a two-year period because of the prices recently paid for other houses in the neighborhood.
3.A homebuyer makes a down payment of 20% instead of the 10% the lender requires.
4.A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,00

1 Answer

1 vote

Final answer:

The principle of contribution is illustrated in situation 4, where a homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.

Step-by-step explanation:

The principle of contribution is illustrated in situation 4, where a homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000. In this case, the additional bathroom contributes to the overall value of the house.

Contribution refers to how a specific improvement or feature adds value to the property as a whole. By adding a third bathroom, the homeowner has increased the functionality and desirability of the house, leading to a higher appraised value.

User Christopher Spears
by
7.8k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories