Real Estate Math

A Colorado home is worth $550,000 today. If it appreciates at 4% annually, what will it be worth in 3 years? (Round to the nearest dollar.)

AA. $616,534
BB. $618,400
CC. $617,848✓ Correct
DD. $614,000

Explanation

Future Value = Present Value × (1 + rate)^years = $550,000 × (1.04)^3 = $550,000 × 1.124864 = $618,675. The04^3 = 1.124864. $550,000 × 1.124864 = $618,675. Closest: B ($618,400). Correct: 1.

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