Real Estate Math
A property sold for $625,000. If the market appreciation rate was 4% per year compounded, what was the approximate purchase price 3 years ago?
A$625,000✓ Correct
B$580,000
C$556,250
D$540,000
Explanation
Original price = $625,000 / (1.04)³ = $625,000 / 1.124864 ≈ $555,618 ≈ $555,480. To solve this, multiply the relevant values: $625,000 at 4%.. The correct answer is $625,000.. This is a common calculation on the Utah real estate exam.
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