A dwelling built 15 years ago has an effective age of 8 years and a total economic life of 50 years. What is its remaining economic life?
Correct Answer
C) 42 years
50−8 = 42 years remaining. Common errors: using the construction age instead of the supported effective age gives 35 years; adding effective age to total life instead of subtracting gives 58 years; reporting the effective age instead of the remaining life gives 8 years.
Why This Is the Correct Answer
Option C is correct because remaining life equals total economic life minus effective age, and the effective age, not the construction age, governs. That gives 50 - 8 = 42 years.
Why the Other Options Are Wrong
Option A: 8 years
Option A, 8 years, is wrong because 8 years is the effective age, not the remaining life. Remaining life is 50 - 8 = 42 years.
Option B: 35 years
Option B, 35 years, is wrong because it subtracts the 15-year construction age (50 - 15) instead of the supported 8-year effective age. The correct figure is 50 - 8 = 42 years.
Option D: 58 years
Option D, 58 years, is wrong because it adds the effective age to total life (50 + 8) instead of subtracting it. Remaining life is 50 - 8 = 42 years.
Condition beats birthday
For age-life work, use the age the building acts (effective age), not the age on its birth certificate.
How to use: Use this when a question gives both actual and effective age.
Exam Tip
When both actual and effective age appear, the age-life method uses effective age. The actual age is often there to build a distractor.
Common Mistakes to Avoid
- -Using actual age instead of effective age
- -Adding effective age to total life
- -Reporting effective age as remaining life
Concept Deep Dive
Analysis
This question tests using effective age rather than actual (construction) age in the age-life identity. The building is 15 years old but has a supported effective age of 8 years. Remaining life is total life minus effective age, 50 - 8 = 42 years.
Background Knowledge
Effective age reflects condition and utility, so a well-maintained or updated building can have an effective age lower than its actual age. The age-life method uses effective age, not chronological age, to find depreciation and remaining economic life.
Real-World Application
A 15-year-old house was well maintained and recently updated, so the appraiser estimates an effective age of 8 years. With a 50-year economic life, the appraiser reports about 42 years of remaining life.
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