Devante J. answered • 06/13/19
Business & Data Analyst here to help make learning a breeze!
To find the absolute value, remember the value can not be a negative number. Absolute values are always Positive, for example |-10| = 10 and |10| = 10.
For this problem, we need to carefully read through and figure out exactly what is being asked. Carefully reading through the problem will help us determine what data is useful and what data is not needed to find our answer.
We are told that the average sale of a house decreased from $310,000 to $165,000. This occurred during February 2008 - February 2013.
The question asked us what is the absolute value in the average sales price decrease. To find this we have to find the absolute value of the difference between the average sales prices.
Now we were given a time range in which these average sales values were given. For the purpose of this question, the time range is not needed to find the absolute value of the decrease in average sales price. What we need is the two sales prices in which we will take the absolute value of their difference.
It is important to remember that the difference between numbers is found by subtracting the numbers. Remember when subtracting, we want to start with the end value first and subtract away the starting value. The equation looks like x2 - x1.
In this case, our end value is the $165,000 since it is the final value of the average sales price given in the question. Therefore, the $310,000 is our starting value that we are subtracting away from the ending value since it is the first value given in the question to start with.
Now, utilizing this analysis of the problem, we can derive our equation to find the difference between the average sales prices of homes. Remember we use the equation x2 (Ending value) - x1 (Starting value).
This will lead us to derive the equation $165,000 - $310,000. Now if you look carefully, you will see that this equation would produce a negative result, and in the case of average home sales, we can not have a negative answer.
Now remember the question asked for the absolute value of the decrease in average home sales , and as we explained earlier, absolute values are always a positive answer. Therefore our equation will look like this:
|$165,000 - $310,000| = |-$145,000| =$145,000. So our answer for the absolute value of the average sales of homes between February 2008 and February 2013 decreased by $145,000.
As a bonus, this information is important because it highlights the period in which the US went through a recession and home price values plummeted due to the decrease in home buyers and over supply of properties. Much the properties were in foreclosure due to failed payment of mortgages because the increase in interest rates made mortgage payments expensive for home owners.
There is much more to this event, but this is a basic explanation of how this problem is used in a real world application.
