Real Estate Math

A property in Indiana was purchased for $420,000 and held for 6 years. It appreciated 4% per year compounded. What is the approximate future value?

A$501,600

B$520,000

C$531,634✓ Correct

D$540,000

Explanation

FV = $420,000 × (1.04)^6 = $420,000 × 1.2653 = $531,434 ≈ $531,634. To solve this, multiply the relevant values: $420,000 at 4%.. The correct answer is $531,634.. This is a common calculation on the Indiana real estate exam.

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