Question

A house has been losing 2% of its value over the past several years. The house was

originally purchased for $250,000. To the nearest dollar, how much should the house
be worth 20 years after the initial purchase?

Answer 1

• $166902

Explanation:

The value reduction is 2%.

The value after one year is 98% of the current value, or 0.98 times. And every year after the value is reduced 0.98 times.

After 20 years the value is going to be:

• V = $250000*0.98²⁰ = $166902 (rounded)