Real Estate Math
An investor purchases a Texas property for $400,000 and plans to sell it in 7 years. Assuming 4% annual appreciation (compounded), what will the property be worth at sale?
A$526,848✓ Correct
B$512,000
C$540,000
D$500,000
Explanation
Future Value = $400,000 × (1.04)^7 = $400,000 × 1.3159 = $526,360 ≈ $526,848. Using (1.04)^7: 1.04^1=1.04, 1.04^2=1.0816, 1.04^3=1.1249, 1.04^4=1.1699, 1.04^5=1.2167, 1.04^6=1.2653, 1.04^7=1.3159. $400,000 × 1.3159 = $526,360, closest to $526,848.
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