Real Estate Math
A Hawaii investor buys a property for $720,000 and sells it 4 years later for $864,000. What is the average annual appreciation rate?
AA. 4.5%
BB. 4.0%
CC. 5.0%✓ Correct
DD. 3.5%
Explanation
Total appreciation = ($864,000 - $720,000) / $720,000 = 20% over 4 years. Average annual = 20% / 4 = 5% per year (simple average).
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