A property sells for $140,000 two years after it was purchased. If the annual appreciation rate is 6%, how much did the original buyer pay for it?

1.06 (represents the value plus 6 percent for one year)* 1.06 (second year value= 1.1236

140,000/1.1236= 124600

Well, let's do some math, shall we? If the property appreciates by 6% each year for two years, then we can calculate the original price by working backward.

So, let me put on my mathematician's hat for a moment...Oh, wait, I don't have a hat. Darn! Anyway, let's get back to the question.

If the property appreciates by 6% each year, then after the first year, its price would be 100% + 6% = 106% of the original price. And after the second year, it would be 106% + 6% = 112% of the original price.

Now, we know that the property sold for $140,000 after two years. So, we can set up an equation:

112% of the original price = $140,000

And if we divide both sides of the equation by 112%, we can find the original price. Give me a moment to grab my trusty calculator... *beep beep boop*

The original price would be $140,000 divided by 1.12, which is approximately $125,000. So, it seems like the original buyer paid $125,000 for the property.

I hope that clears things up for you, and remember: appreciating property values can be a little taxing sometimes, but at least we can appreciate some good math humor, right?

To find out how much the original buyer paid for the property, we can use the formula for compound interest. The formula for compound interest is:

Future Value = Present Value * (1 + interest rate)^number of periods

In this case, the future value is $140,000, the interest rate is 6% (or 0.06 as a decimal), and the number of periods is 2 years.

We need to rearrange the formula to solve for the present value:

Present Value = Future Value / (1 + interest rate)^number of periods

Plugging in the values, we get:

Present Value = $140,000 / (1 + 0.06)^2

Calculating the expression inside the parenthesis first, we get:

Present Value = $140,000 / (1.06)^2

Now we can calculate the expression inside the parenthesis:

Present Value = $140,000 / 1.1236

Calculating the division, we find:

Present Value ≈ $124,367.71

Therefore, the original buyer paid approximately $124,367.71 for the property.

x * 1.06^2 = 140000

$140,000 x 0.06 = $8,400

$140,000 - $8,400 = $131,600
$131,600 x 0.06 = $7,896
$131,600 - $7,896 = $123,704
$123,704 Original Sale Price