Question

Assume straight-line appreciation.....
An antique clock is expected to be worth $475 after 3 years and $870 after 6 years. What will the clock be worth after 9 years?

Answer 1

Presuming straight-line appreciation means that the value goes up evenly (ie, at the same rate), note here that they gave you two prices separated by exactly 3 years, and are asking you for a new value, again exactly 3 years later.

Find the difference between the two prices over the 3 year time period, then add that back to the 6 year price to get the 9 year price. (It's essentially slope you're using here.)

Answer 2

Sorry, I'm still not getting it...

Answer 3

Look at it this way: At year #3 it was worth $475, and at year #6 it was worth $870. That means it went up $870-$475 = $395 in exactly 3 years.

Now they want to know what it'll be like in year #9. They mention "straight-line appreciation", which means the value goes up at the exact same rate all of the time. Since we already know it'll go up $395 in 3 years, and we know that year #9 just happens to be exactly 3 years after year #6....we can add $395 to the value at year #6 to get the final value.

Answer 4

LOL! Now I feel like a real dummy! I was trying to use the equations and making it really harder on myself! Thanks for your help!

Answer 5

NP...if they had asked you for a different time span, say year #10, you'd have to find the slope (algebra concept), then use that...would have been harder.

Answer 6

The book only gives depreciation and uses the slope formula! So I was just trying to make it harder! I've been cramming for Biology and Psychology also! Think I've bite off more than I can chew this summer!

Answer 7

Good luck with that...sounds like fun.

Answer 8

Thanks, no fun yet! :(