posted by Nance B on .
Because of a recession, the value of a new house depreciated 10% each year for three years in a row. Then, for the next three years, the value of the house increased 10% each year. Did the value of the house increase, decrease, or remain the same after 6 years?
it decreased the first three years, then increased the next three years. so basically its like it remained the same
Decreasing for 3 years at 10%/yr, the value is now .9^3 = .729
Increasing for 3 years from the reduced value, it is finally worth
.729*1.1^3 = .970
SO, the house lost 3% over the 6 years.