Real Estate Math

A home was purchased 3 years ago for $320,000 and appreciated at 5% per year (compounded). What is its current value?

A$368,000
B$370,440✓ Correct
C$369,200
D$371,640

Explanation

Year 1: $320,000 × 1.05 = $336,000. Year 2: $336,000 × 1.05 = $352,800. Year 3: $352,800 × 1.05 = $370,440.

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