Question

A comparable property sold 17 months ago for $115,000. If the appropriate adjustment for market conditions is 0.30% per month (without compounding), what would be the adjusted price of the comparable property

Answer 1

Answer and Explanation:

The computation is shown below:

Without compounding, the adjusted price of the comparable property is

= $115,000 × (1+ (0.003 × 17))

= $115,000 × 1.051

= $120,865

And,

With compounding:

= $115,000 × (1.003)^10

= $115,000 × 1.030408

= $118,496.92

In this way it should be calculated