Question 124930: A home purchased for $300,000 depreciated 8% over a 1-year period. What was the value of the home at the end of the year?
Answer by bucky(2189)   (Show Source):
You can put this solution on YOUR website! In the one year period it lost 8% of its value ... so it lost 0.08 times $300,000.
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If you multiply 0.08 times $300,000 you get an answer of $24,000.
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So the home started out at $300,000 and it lost $24,000 of its value. That means that its
worth at the end of the year was $300,000 minus $24,000 or $276,000.
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Another way of working this problem would be to say that in a one-year period a home lost 8%
of its value. Therefore, its new value was 92% of its original value [from 100% minus 8% = 92%].
And since 92% = 0.92, just multiply the original value of $300,000 by 0.92 and you again get $276,000
as its value one year after you purchased it.
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Hope this helps you to understand the problem.
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