Question

Mr. Hurst's house increased in value to $185,400 one year after he bought it. The annual rate of increase was 3%. Which expression would calculate the initial value of the house?

Answer 1

House value= $185400

Initial value V = ?

Anual increase= (3/100)•V

then , is valid this equation

185400 = V + (3/100)•V

Now solve for V

V= 185400/(1+ (3/100)) = 185400/1.03

V= 180000

Then answer is

Initial House value was =$180000