Real Estate Math

A Delaware property's land is valued at $80,000 and the improvements at $220,000. Using a 40-year economic life and 10 years of age, what is the straight-line depreciation for one year?

A$4,500

B$5,500✓ Correct

C$7,333

D$3,500

Explanation

Annual depreciation = Improvement Value ÷ Economic Life = $220,000 ÷ 40 = $5,500 per year. Land is not depreciated.

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