one of real state.

Original value = present value * (1 + interest rate)^number of years
assuming that this house has been depreciated for 10 years we get

original value - 12500 * (1 + 0.025) ^10 = 12500 * 1.28 = 16001.07

mario franco:

if a house depreciates at the rate of 2.5 percent per year for 10 years and has a present value of $12500 , what was the original value of the house?

Our guest was close - but no candy cane, sorry. It was a really good try though.

Let's think about this one
Let the original price be $A (which is 100% of A)

After 1 year it will depreciate by 2.5% of A
So its new value will be 100% of A - 2.5% of A which is (100-2.5)% of A => 97.5% of A => 0.975A

So original value = A
after 1 year A*0.975 dollars
after 2 years A * 0,975 * 0.975 = A * 0.975 ²
...
after 10 years what do you think it will be? but you know that after 10 years it is $12500.
So set up an equation and solve it.
Maybe you could also think about what formula you could of used in the first place.