Tuesday

September 2, 2014

September 2, 2014

Posted by **chandice** on Wednesday, July 8, 2009 at 10:09pm.

rental house can depreciate its value over a period of 27 1/2

years, meaning that the value of the house declines

at an even rate over that period of time until the value is $0

a. By what fraction does the value of the house depreciate

the first year?

b. If the house is judged to be worth $85,000, what is

the value of the first year’s depreciation?

- math word problem -
**Reiny**, Wednesday, July 8, 2009 at 11:14pmThe wording of the question is somewhat confusing.

You state that the value declines at an "even" rate.

Are you saying that the rate is the same for each year? I am sure that is what you meant.

Mathematically, the value can never be zero, but since we are dealing with money, I picked .004 cents arbitrarily.

So let the rate of depreciation be r

then

85000(1-r)^27.5 = .004

(1-r)^27.5 = .004/85000

[(1-r)^27.5]^(1/27.5) = (.004/85000)^(1/27.5)

1-r = .54144

r = .45856

so it depreciates at a rate of 45.856% per year

for a) change the % to a fraction

for b) take 45.856% of 85000

**Answer this Question**

**Related Questions**

Huge Math Word Problem - The owner of a rental house can depreciate its value ...

math - The Rental Depreciation Problem. The owner of a rental house can ...

Math156 - I can understand in my head how to solve it I can't figure it out on ...

math - I can understand in my head how to solve it I can't figure it out on ...

math - Use any problem solving strategy to solve the following problem.The value...

Math - Because of a recession, the value of a new house depreciated 10% each ...

Math130 - Because of a recession, the value of a new house depreciated 10% each ...

finance - can anyone help me set up this problem bc im totally lost.... if a ...

math - The price in dollars of a house during a period of mild inflation is ...

Math - A house loses 18% of its value. Its new value is £129 000. Work out the ...