Jenny's property tax rate is 2%. Her house is currently worth $400,000. The city is about to build a new high-speed rail project nearby, which will increase her house's value by 25%. Jenny can only afford to spend $15,000/year on property tax. How many dollars worth of improvements can she make to her house before her property tax bill gets too high?
First find how much the rail project will increase the house value by multiplying the initial value by 25%: $400,000 * .25 = $<<400000*.25=100000>>100,000
Then add that amount to the initial value to find the new value: $100,000 + $400,000 = $<<100000+400000=500000>>500,000
Then divide the maximum amount of property tax Jenny can afford to pay by the property tax rate to find the maximum value her house can have: $15,000 / .02 = $<<15000/.02=750000>>750,000
Now subtract the house's value after the rail project from the maximum value to find how much value the improvements can have: $750,000 - $500,000 = $<<750000-500000=250000>>250,000
#### 250000