Question

The prices of houses in Tennessee have been on a steady incline for the last several years. If the average price of a house has increased by 8.5% over the last year to $135,000, what was the average price of a house last year?

Answer 1

Answer:

The average price of a house last year was = $124,423.96

Step-by-step explanation:

Let the average price of houses in Tennessee last year in dollars be = $x$

This year the increase percentage in average price was = 8.5%

The change in average price can be calculated in dollars as:

⇒ $8.5\%\ of\ \textrm{Last year average price}$

⇒ $0.085\times x$

⇒ $0.085x$

New increased average price in dollars can be calculated as:

$\textrm{Last year average price + Increase in average price}$

⇒ $x+0.085x$

⇒ $1.085x$

The new increased average price actually is = $135,000

So, we have,

$1.085x=135000$

Dividing both sides by 1.085

$\frac{1.085x}{1.085}=\frac{135000}{1.085}$

∴ $x=124423.96$

Thus average price of a house last year was = $124,423.96