Real Estate Math
An investor purchased a rental property for $250,000 and sold it for $310,000 five years later. What is the annual appreciation rate (simple, not compounded)?
A4.8%✓ Correct
B24%
C4%
D6%
Explanation
Total appreciation = ($310,000 – $250,000) / $250,000 = $60,000 / $250,000 = 24%. Annual simple appreciation = 24% / 5 years = 4.8% per year. Note: this is simple appreciation, not compound annual growth rate (CAGR).
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