Two comparables carry identical houses on different lots. One sits on 8,000 square feet and sold for $310,000; the other sits on 10,000 square feet and sold for $322,000. What rate per square foot of land does the pair indicate?
Correct Answer
B) $6.00
Why this is correct: Calculation: ($322,000 - $310,000) ÷ (10,000 - 8,000) = $12,000 ÷ 2,000 = $6.00. Why the other choices are wrong: $38.75 and $32.20 divide each whole sale price by its lot size, which charges the land for the house standing on it; $1.20 divides the price difference by the larger lot instead of by the difference between the lots.
Why This Is the Correct Answer
Why this is correct: Calculation: ($322,000 - $310,000) ÷ (10,000 - 8,000) = $12,000 ÷ 2,000 = $6.00. Why the other choices are wrong: $38.75 and $32.20 divide each whole sale price by its lot size, which charges the land for the house standing on it; $1.20 divides the price difference by the larger lot instead of by the difference between the lots.
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