# Math

posted by .

Real Estate an office building purchased for \$1, 200,000 is appreciating because of rising property values in the city. At the end of each year its value is 105% of its value at the end of the previous year.
a. Use a recursive formula to determine what the value of the building will be 7 years after it is purchased.
b. Use an explicit formula to find the value of the building 4 years after it is purchased.
c. During the eighth year, the building begins to decrease in value at a rate of 8% per year. What would its value be after the 15th year?

• Math -

5% growth is just

1200000*1.05^n after n years

for #c, we have

1200000*(1.05)^7*(0.92)^8 = 866,581

## Similar Questions

1. ### Accounting

On January 1, 2006, Mythical purchased some office equipment, paying \$24,000. It is anticipated that the equipment will last 4 years and have a zero salvage value at the end of the four years. 1) Make the adjusting entry for depreciation …
2. ### Expected Utility-Econ

Suppose that your wealth is \$250,000. You buy a \$200,000 house and invest the remainder in a risk-free asset paying an annual interest rate of 6 percent. There is a probability of 0.001 that your house will burn to the ground and its …
3. ### Math

A property company purchases a new office space for lease to a small business for \$2,400,000 including a land value of\$400,000. the property is placed in service on March 15,1999.using MACRS,what is the depreciation on this property …
4. ### Accounting

Assume that at the beginning of 2000, Quick Travel, a FedEx competitor purchased a used Boeing 737 aircraft at a cost of 60,000,000. Quick Travel expects the plane to remain useful for 5 years (5 million miles) and to have a residual …
5. ### Accountng

A property was purchased for \$2,400,000 with a land value of \$400,000. The property was placed in service on March 15the, 1999. using MACRS, calculate depreciation at the end of one year
6. ### UALR

Information about a project Darcy Company is considering is as follows: Investment \$1,000,000 Revenues \$700,000 Variable costs \$140,000 Fixed out-of-pocket costs \$80,000 Cost of capital 12% Tax rate 40% The property is considered 5-year …
7. ### accounting

Information about a project Darcy Company is considering is as follows: Investment \$1,000,000 Revenues \$700,000 Variable costs \$140,000 Fixed out-of-pocket costs \$80,000 Cost of capital 12% Tax rate 40% The property is considered 5-year …
8. ### business math

Dennison Property Company purchases a new office space for lease to small businesses for \$2,400,000, including a land value of \$400,000. The property is placed in service on March 15, 1999. Using MACRS, what is the depreciation on …
9. ### mcc

Larry bought a house for \$220,000. After one year, its value appreciated (increased in value) by 15%. During the second year, its value depreciated (decreased in value) by 12% from its value at the end of the first year. What was the …
10. ### math

Real Estate an office building purchased for \$1, 200,000 is appreciating because of rising property values in the city. At the end of each year its value is 105% of its value at the end of the previous year. a. Use a recursive formula …

More Similar Questions