Home values in a town have declined 6% per year for each of the past 4 years. What was the total percentage decrease in home values during the four-year period?

Question

Financial mathematics

Answer 1

(1-.06)^4=.94^4=.78975

1-.78975= .21025= about 21% decrease in 4 years

.06x4=.24=24% is close but not accurate

Answer 2

(1-.06)^4=.94^4=.78975

1-.78975= .21025= about 21% decrease in 4 years

.06x4=.24=24% is close but not accurate