What is the Land-Building Ratio if the selling price is $125,000 and the ratio is 1:4?

To determine the Land-Building Ratio, it's essential to understand the meaning of the ratio itself. A Land-Building Ratio of 1:4 indicates that for every part of land value, there are four parts of building value. Therefore, to find the individual values of land and building, one must consider the selling price in relation to the ratio.

In this case, the total value of the property, which is the selling price, is $125,000. The components of this total value are defined by the ratio. The ratio can be broken down into parts to find the sum of the parts:

1 (land) + 4 (building) = 5 total parts.

To find the value of one part, you divide the total value by the number of parts:

$125,000 / 5 = $25,000.

Now we can assign values based on the ratio. The land value is 1 part, so:

1 part (land) = $25,000.

Therefore, the value of the land according to the Land-Building Ratio of 1:4, given a selling price of $125,000, is indeed $25,000. This aligns perfectly with the established ratio and the