if you purchased something for $1650 which gained 1.43% value every year and saved it for five years should you sell it if someone offers you 1500 for it?

Question

Amaris

Mathematics

2 February, 16:48

if you purchased something for $1650 which gained 1.43% value every year and saved it for five years should you sell it if someone offers you 1500 for it?

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Answers (1)

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Judith · Answer 1

not if you want your money back

Step-by-step explanation:

Obviously, the offer is for less than what you paid. It is also for less than the current value, since the value has been increasing for 5 years.

The current value is the original value, which we presume is your purchase price, multiplied by the gain each year, 1.0143, for 5 years. The multiplier is ...

1.0143^5 ≈ 1.0735743

so the current value is ...

$1650·1.0735743 ≈ $1771.40

If you want to be paid for the current value, you should not accept an offer lower than $1771.40.

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The offer amount you should accept depends on your goal in the transaction.