Real Estate Math
A South Dakota property was purchased 5 years ago for $200,000. It has appreciated at an average annual rate of 4%. What is the current value?
A$240,000✓ Correct
B$243,331
C$244,163
D$250,000
Explanation
Using compound appreciation: $200,000 × (1.04)^5 = $200,000 × 1.21665 = $243,330 (approximately $243,331). Simple appreciation would be $200,000 × (1 + 5 × 4%) = $240,000, but compound is more accurate.
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