Real Estate Math
A Maine investor buys a rental property for $500,000 and sells it 5 years later for $625,000. The simple (non-compounded) annual appreciation rate is:
A4%
B5%✓ Correct
C6%
D25%
Explanation
Total appreciation = ($625,000 − $500,000) ÷ $500,000 = $125,000 ÷ $500,000 = 25% over 5 years. Simple annual rate = 25% ÷ 5 = 5% per year.
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