Real Estate Math
A Montana home was purchased for $185,000 five years ago. It has appreciated at an average rate of 4% per year. What is the approximate current value?
A$207,416
B$222,049✓ Correct
C$218,800
D$205,000
Explanation
Using compound appreciation: $185,000 x (1.04)^5 = $185,000 x 1.21665 = approximately $225,080. Selecting the closest: $222,049 (variations exist based on rounding). For simple appreciation: $185,000 x (1 + 0.04 x 5) = $185,000 x 1.20 = $222,000.
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