1. Sarah bought a house this morning for $120,000. If this house has increased in value by 11% per year for the last 50 years, what was the value of the house 12 years ago?
2. Suppose an investor purchased an office building for $2,800,000. The land is valued at $800,000 and the improvements are valued at $2,000,000. Based on a cost recovery period of 39 years (ignoring any mid-month or mid-year convention), what is her cost recovery allowance in year two of her investment holding period? Round your answer to the nearest dollar penny.