Question

Lance paid $175,000 for his house in 2003 and sold it for $325,000 in 2006. What function did the house serve during the time Lance owned it?

Answer 1

Answer: store of value asset

Explanation:

A store of value is a function of an asset that can be used save value without depreciating over a period of time. They usually retain their purchasing power over the period of time.

Examples may include jewelry, Gold, diamond and other products that retain its value, while perishable goods are poor store of value item because they lose value overtime.

For the case above the value of the house increased from $175,000 to $325,000 over the period of three years which makes it a store of value product as a result of its retained (and even increased) value.