Real Estate Math

A South Dakota property is purchased for $275,000. Two years later it sells for $310,000. What is the annual appreciation rate?

A5.5%
B6.36%✓ Correct
C12.73%
D6.18%

Explanation

Total appreciation = ($310,000 − $275,000) ÷ $275,000 = $35,000 ÷ $275,000 = 12.73% total over 2 years. Annual rate = 12.73% ÷ 2 = 6.36%.

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