During a prolonged recession, property values on Long Island depreciated by 8% every six months. If my house cost $200,000 originally, how much was it worth 5 years later Round your answer to the nearest cent. ?
A)$86,877.39
B) $86,877.69
C) $86,878.79
D) $86,878.69
E) $86,882.69

Question

During a prolonged recession, property values on Long Island depreciated by 8% every six months. If my house cost $200,000 originally, how much was it worth 5 years later  Round your answer to the nearest cent. ?
A)$86,877.39
B) $86,877.69
C) $86,878.79
D) $86,878.69
E) $86,882.69

Quizplus · Accepted Answer

First, we need to figure out how many 6-month periods there are in 5 years:
5 years * 12 months/year = 60 months
60 months / 6 months/period = 10 periods

Next, we need to calculate the depreciation factor. If the property value is decreasing by 8% every 6 months, then the value after each period is 92% of the previous value (since 100% - 8% = 92%).

So, the value of the property after 10 periods is:
$200,000 * 0.92^10 = $86,877.69

Rounding to the nearest cent gives us answer choice B, $86,877.69.

During a Prolonged Recession, Property Values on Long Island Depreciated