Question

Because of a recession, the value of a new house depreciated 10% each year for 3 years in a row. Then, for the next 3 years, the value of the house increased 10% each year. Had the value of the house increased or decreased after 6 years? Explain please!!

Answer 1

the original value does not matter

e.g. let's start with 100,000
after 3 years:
value = 100,000(.9)^3
after 3 more years:
value = 100,000(.9)^3 (1.1)^3
= 97,029.9

so what do you think?

Here is a new question for you.
Would it matter if the value first increased by 10% for the first 3 years, and then decreased by 10% for the next 3 years ?

Answer 2

I am 100% confused on this.