Real Estate Math

A Colorado property has a land value of $90,000 and improvement value of $310,000. The improvements are 15 years old with a 40-year economic life and no residual value. What is the depreciated value of the improvements using straight-line depreciation?

AA. $193,750✓ Correct
BB. $116,250
CC. $204,500
DD. $200,000

Explanation

Annual depreciation = $310,000 ÷ 40 = $7,750/year. Total depreciation after 15 years = $7,750 × 15 = $116,250.

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