Property Valuation
When a Maryland appraiser uses the cost approach for a 20-year-old residential property, they must estimate accrued depreciation. If the total depreciation is 30%, and the replacement cost new is $400,000, the depreciated value of improvements is:
A$120,000
B$280,000✓ Correct
C$320,000
D$370,000
Explanation
Depreciation = $400,000 × 30% = $120,000. Depreciated value = $400,000 – $120,000 = $280,000. To solve this, multiply the relevant values: $400,000, at 30%.. The correct answer is $280,000.. This is a common calculation on the Maryland real estate exam.
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