Question

A comparable property sold 10 months ago for $98,500. If the appropriate adjustment for market conditions is 0.30% per month (with compounding), what would be the adjusted price of the comparable property?

Answer 1

Answer:

$101,495.20

Explanation:

The comparable property value with compound interest

The formula for calculating future compound values

FV = PV × (1+r)n

In this case:

PV = 98,500

r =0.3% the interest rate per month

n = 10 compound periods

FV = 98,500 x (1+ 0.3/100)10

=98,500 x (1.003)10

=98,500 x 1.030408

=$101,495.20