Real Estate Math
An Indiana appraisal shows the building value is $340,000 with a 40-year economic life. If the building is 10 years old, what is the physical depreciation using age-life method?
A$68,000
B$75,500
C$85,000✓ Correct
D$100,000
Explanation
Depreciation = (Age ÷ Economic life) × Building value = (10 ÷ 40) × $340,000 = 0.25 × $340,000 = $85,000.
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