A house sold for $300,000 and, with no physical change, resold 24 months later for $336,000. What monthly rate of change does this pair indicate on a simple basis?
Correct Answer
A) 0.5% per month
Why this is correct: the pair shows $36,000 on $300,000, or 12%, spread over the 24 months between the sales. Calculation: 12% ÷ 24 = 0.5% per month. Why the other choices are wrong: 1.0% divides the total change by twelve months rather than the twenty-four that actually elapsed; 0.25% divides by forty-eight; 0.6% does not follow from either figure in the stem.
Why This Is the Correct Answer
Why this is correct: the pair shows $36,000 on $300,000, or 12%, spread over the 24 months between the sales. Calculation: 12% ÷ 24 = 0.5% per month. Why the other choices are wrong: 1.0% divides the total change by twelve months rather than the twenty-four that actually elapsed; 0.25% divides by forty-eight; 0.6% does not follow from either figure in the stem.
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A comparable sold for $320,000 and requires percentage adjustments of +5% for location, -3% for condition and +2% for size. Applied as a single net percentage, what is the adjusted price?