Time and Average

tsmith93 wrote: ↑

Wed Mar 03, 2010 6:35 pm

Thirty years ago, Mr. and Mrs. Lopez purchased a house. On average, the value of the house has doubled every 6 years. If the house is worth $320,000 today, what did they pay for it 30 years ago?

(A)$5,000
(B)$10,000
(C)$64,000
(D)$160,000
(E)$320,000*2^5

If the value of the house doubles every 6 years, then the value of the house is halved compared to its value 6 years ago. Since the house is worth $320,000 today,

6 years ago, it was worth $160,000.

6 more years ago (or 12 years ago), it was worth $80,000.

6 more years ago (or 18 years ago), it was worth $40,000.

6 more years ago (or 24 years ago), it was worth $20,000.

Finally, 6 more years ago (or 30 years ago), it was worth $10,000, so they paid $10,000 for the house.

Answer: B