1. ## Basic Algebra help

I'm taking a real estate course and brushing up on my math. I'm doing a practice test from my book and this problem has me stumped, and there's no explanation for it in the book.

4. ## Re: Basic Algebra help

Originally Posted by ROCKCDXX
2.5% of the original value is not the same as 2.5% of the current value... the answer should be \$50000 I believe, but I don't know how to get there...
if it is loosing 2.5% every year, then if you go back in time, the price should also increase 2.5% every year.

5. ## Re: Basic Algebra help

right but by 2.5% of the unknown number

6. ## Re: Basic Algebra help

??

value of property 10 years ago= (1.025)^10years (property value now)

7. ## Re: Basic Algebra help

Never mind I figured it out... for future reference, knowing the house has depreciated 25% over 10 years, 37500 represents 75% of the original value... 37,500/75%= 50,000... thanks for the help anyway

8. ## Re: Basic Algebra help

You need to use the formula for Compound interest i.e., A = P ( 1 + r/100)^n, where A is amount, P - principal, r rate and n time. In this case we will have to take rate as negative since it is depreciation.